Weakness in Cattle Futures Continues, Hogs Mixed

Cattle futures extended losses as traders continued to take stock of increases in supply expected early next year.

Live cattle contracts for October fell 0.9% to $1.08275 a pound at the Chicago Mercantile Exchange on Tuesday. Front-month September feeder cattle futures rose 0.1% to $1.50575 a pound while later months fell.

The ongoing weakness came after the U.S. Department of Agriculture said last week that feeders placed more cattle than expected in feedlots for fattening in August, suggesting that supplies of slaughter-ready cattle would increase early next year and depress prices. The agency also said that stocks of beef in commercial freezers rose 10% in August from a month earlier, well above expectations.

That prompted a selloff in cattle futures, with a number of contracts falling to their lower limits on Monday.

Hog futures were mixed. The CME’s front-month October lean hog contract fell 1.9% to 55.25 cents a pound, hitting a new low for the year, while lat

er months rose.

Cash and pork prices have struggled amid high slaughter numbers, which rose to a record 460,000 head on Monday, though wholesale pork inched higher on Monday and at midday Tuesday.

Analysts see little prospect of near-term relief in the hog market, though some expect prices to firm later this year as meatpackers work through slaughter-ready supplies.

Soybean futures fell on higher yield reports and a slower pace of export sales announcements.

November soybean contracts fell 0.8% to $9.63 1/2 a bushel at the Chicago Board of Trade.

Analysts said yield data from the early stages of the oilseed harvest, which was 10% complete as of Sunday, increasingly suggested that yields would come in on the high end of estimates.

That increased the likelihood of lower oilseed prices going forward as newly harvested soybeans bolstered existing stockpiles.

Grain futures also closed lower, with outside influences pressuring those markets. The dollar rose, making U.S. crops less competitive in the export market, while falling crude oil futures eased money flows out of the commodity sector.

CBOT December corn futures fell 0.4% to $3.52 1/4 a bushel, while December wheat contracts closed 0.1% lower at $4.53 3/4 a bushel.

Oil prices fell Tuesday, as some investors took profits after U.S. crude entered a bull market on Monday.

Light, sweet crude for November delivery fell 34 cents, or 0.7%, to $51.88 a barrel on the New York Mercantile Exchange. Brent crude, the global benchmark, declined 1% to $58.44.

U.S. oil prices posted their largest one-day advance of the year Monday to re-enter bull-market territory, settling nearly 23% above this year’s low hit in early June. Brent closed at its highest level since July 2015.

The rapid ascent had some investors cashing in on the gains Tuesday — U.S. crude is up roughly 10% this month alone.

Gasoline futures fell 1.3% to $1.6988 a gallon and diesel futures shed 0.6% to $1.8453 to end a four-session winning streak after closing at their highest level since June 2015 Monday.

Natural gas prices swung between small gains and losses Tuesday, with many investors and analysts waiting to see if warmer weather stokes electricity demand.

Futures for October delivery closed down 0.1 cents, or less than 0.1%, to $2.9180 a million British thermal units on the New York Mercantile Exchange. Prices have fallen in five of the last six sessions.

Stocks closed the day mixed, with the Dow losing 11 points to close at 22284. Nasdaq posted a gain of 9 points, closing at 6380, and the S&P 500 finished the virtually unchanged at 2496.


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