Cattle futures fell on Thursday as traders bet a recent rally had reached a top.
Rising beef prices and lower-weight cattle have not been enough to stave off selling in the cattle market, with futures falling around 9% from a week ago.
Live cattle futures for June delivery fell 0.2% to $1.23925 a pound at the Chicago Mercantile Exchange. Feeder cattle futures also closed lower.
Part of the selling was fueled by lower prices in this week’s cash trade. Packers paid an average of $1.38 a pound in Wednesday’s market, down from $1.45 a week ago.
But wholesale beef prices nevertheless continued to gain, rising to $2.47 a pound on Thursday. Analysts said beef is at the highest level since August 2015.
The combination of falling cash prices and rising beef values has sent beefpacker margins shooting into the black. That could give them more flexibility to raise bids on the cash market next week, said Brian Hoops, president of brokerage Midwest Market Solutions.
Hog futures also slid on Thursday, with CME June lean hog futures closing down 0.2% at 77.05 cents a pound.
Packers continued to pay more for hogs on the cash market, which is at a discount to futures. Sales were expected as much as $2 higher per 100 pounds in Thursday’s trade.
Corn futures turned lower Thursday as traders responded to weaker global demand for U.S. grain.
The Department of Agriculture reported weekly export sales of 277,700 metric tons for 2016-17, the lowest so far this year and below analyst expectations.
“Those are not good numbers,” said Brian Hoops, president of brokerage Midwest Market Solutions, adding that an increase in planting pace also fueled selling.
In its Wednesday supply-and-demand report, the USDA forecast U.S. corn exports falling by 350 million bushels as Brazilian and Argentine producers ramp up production.
Most actively traded July corn futures fell 1.2% to $3.69 1/4 a bushel in Thursday’s session at the Chicago Board of Trade.
But the USDA also projects falling global supplies of corn from this season to the next, along with a reduction in global soybean stocks. Analysts said that bodes well for grain and oilseed futures longer term.
“The scales have begun to tilt towards lower global supplies,” said Dan Hueber, manager of advisory firm the Hueber Report. “That should point to a more positive price outlook at least through the next few months.”
Wheat futures rose on Thursday. Snow and rain in key growing regions of the U.S. have delayed planting of this year’s spring wheat crop. The USDA said on Monday that a little over half of the crop had been planted, well behind last year, and weather continues to complicate fieldwork.
Mr. Hoops said farmers likely would switch to other crops as the delay begins to chip away at yield.
“If they don’t get it in the ground, they’ll lose any profitability at all,” he said.
CBOT July wheat futures rose 0.5% to $4.33 3/4 a bushel. CBOT July soybeans fell 0.4% to $9.66 1/4 a bushel.
Oil prices rose Thursday as investors became more optimistic about the effects of production cuts from the world’s major oil exporters.
Some are still buying based on U.S. government data from Wednesday showing falling storage levels, a trend some attribute to global output cuts. Others believe these exporters, led by the Organization of the Petroleum Exporting Countries, are likely to keep cutting back.
Light, sweet crude for June delivery recently gained 56 cents, or 1.2%, to $47.89 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, gained 55 cents, or 1.1%, to $50.77 a barrel on ICE Futures Europe.
Gasoline futures rose 2.26 cents, or 1.5%, to $1.5622. They have advanced 4.9% in just two sessions, their best back-to-back gains in two months.
Diesel futures added 1.45 cents, or 1%, to $1.4899 a gallon. Its two-session gains of 3.3% are the largest in three months.
Natural gas prices jumped to a three-month high, breaking from a recent pattern of tight trading after government data showed a smaller-than-expected storage addition for last week.
Natural gas for June delivery settled up 8.4 cents, or 2.6%, at $3.376 a million British thermal units on the New York Mercantile Exchange. A three-session winning streak with gains of 6.4% has now jolted gas futures out of the tight 40-cent range they had been stuck in for seven weeks.
Gold prices continued to edge higher, as investors turned cautious amid fresh worries of political turbulence in the U.S., after President Donald Trump unexpectedly fired Federal Bureau of Investigation Director James Comey on Tuesday.
Gold for June delivery closed up 0.4% at $1,224.20 a troy ounce.
U.S. stocks fell on Thursday after worse-than-expected sales drops at Macy’s and Kohl’s sparked a selloff in shares of department stores and stirred fears that consumers are not spending enough to drive strong economic growth.
The Dow Jones Industrial Average fell 23 points to end at 20,919.42 points and the S&P 500 lost 5 to 2,394.44. The Nasdaq Composite dropped 13 points to 6,115.96.