Cattle Settles, Pigs Fly

Cattle futures tumbled Monday on expectations of higher supplies early next year.

The U.S. Department of Agriculture said on Friday that feeders placed 3% more cattle in lots for fattening in August than a year earlier, while analysts had expected the rate of placements to fall by 3%.

That pressured a market that had rallied in part on expectations of lower slaughter-ready cattle supplies early next year. It prompted heavy selling in cattle futures on Monday as traders revised their expectations.

December live cattle futures fell by their daily limit of 3 cents, or 2.6%, to $1.14425 a pound at the Chicago Board of Trade. The most-active October contract fell 2.1% to $1.09225 a pound.

Feeder cattle futures were also sharply lower.

Hog futures bounced on Monday, finding support from higher pork prices at midday and as traders bet against the cattle market.

But the near-term outlook is expected to pressure prices, particularly in the cash market. Hog weights, slaughter numbers and pork production all increased last week.

CME October lean hog futures rose 1.1% to 56.325 cents a pound.

Soybean futures started the week lower, giving back most of last week’s gains as fieldwork conditions improved in Brazil.

Wetter weather eased concerns about planting delays in the major South American producer, sparking bets that Brazilian farmers were on track for another year of large oilseed production. Slow planting progress, a result of dry soil conditions, had helped soybean prices higher last week.

Soybean futures for November delivery fell 1.3% to $9.71 1/4 a bushel at the Chicago Board of Trade.

Some analysts said uncertainty around the U.S. corn harvest limited moves in that market on Monday. CBOT December corn futures closed largely unchanged, up 0.1% at $3.53 3/4 a bushel. But others said there was little chance that yields would be low enough to encourage a significant price move higher.

“No matter where you believe the yield will finally end up, it is pretty clear that the U.S. is going to have excess supplies at harvest time,” said Tomm Pfitzenmaier, founding partner at Summit Commodity Brokerage. “That fact is going to make it difficult for the corn market to sustain rallies into the end of the year.”

CBOT December corn futures rose 1% to $4.54 a bushel.

U.S. oil prices returned to bull-market territory while the global benchmark hit a two-year high, as investors gained faith that OPEC will successfully shrink a global supply glut.

A drumbeat of bullish data in September, including the International Energy Agency’s upward revision to its demand outlook, has lifted prices. Investors have become more confident that the Organization of the Petroleum Exporting Countries will continue cutting production and that its efforts are helping bring oil’s supply and demand into balance.

West Texas Intermediate, the U.S. benchmark, rose $1.56, or 3.08%, to $52.22 on the New York Mercantile Exchange, its highest settlement since April.

Brent, the global benchmark rose $2.16, or 3.8% to $59.02 — its highest level since July 3 2015 and its largest daily gain since December.

Natural gas prices fell Monday as hot weather that pushed prices higher early last week looks set to dissipate.

Natural gas for October delivery recently traded down 4 cents, or 1.35%, to $2.919 million British thermal units on the New York Mercantile Exchange.

The Dow Jones Industrial Average on Monday skid for a third straight session, weighed by shares of Apple which have been its biggest drag over the past several sessions. The Dow closed off 53 points, or 0.2%, at 22,296, the S&P 500 index ended down 5.6 points, or 0.2%, at 2,496, while the Nasdaq Composite Index finished down 0.9%, at 6,370, as technology shares were weighed by Apple’s stock drop.


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