Livestock Futures Rise as Dollar Slumps
May 19 2017 - 2:51PM
Dow Jones News
By Benjamin Parkin
CHICAGO--Livestock futures rose Friday as traders bet that a
weak dollar would stoke demand for U.S. meat.
The greenback recently slumped to multimonth lows, helping make
American beef and pork cheaper in the global export market. That in
turn is creating buying interest from major consumers like China,
said Mike Seery, president of Seery Futures, and helping inject
strength into an otherwise sluggish commodity sector.
"Commodities are finally starting to bottom," Mr. Seery said.
"It looks like the dollar is really trending lower."
Hog futures reversed course Friday after opening lower. Lean-hog
futures for June delivery closed 0.4% higher at 79.50 cents a pound
at the Chicago Mercantile Exchange, the highest in over three
months.
Signs of domestic demand for hogs and pork were mixed, however.
Cash prices for hogs slumped by 63 cents to $70.50 per 100 pounds
earlier in the day, while pork prices rose 61 cents to $87.01 per
100 pounds.
Cattle futures also gained as traders bet that more resilient
cash prices would help limit hemorrhaging after prices retreated
from a peak earlier in May. Packers bought 56,000 cattle on
Thursday, with the highest going for $1.36 a pound in Nebraska.
That was below last week, but analysts said the considerable
premium to futures would nevertheless help limit losses for
now.
"We've had one of the biggest rallies in history," said Jim
Clarkson, an analyst with A&A Trading on the floor of the
Chicago Board of Trade. "Now we're coming off."
CME June live cattle rose 0.4% to $1.2345 a pound.
One factor with potential to change the trend is Chinese
appetite for U.S. beef. Traders are keenly watching for signs that
Washington and Beijing will make good on an agreement announced
earlier this month to lift the Chinese restriction on U.S. beef
imports. That has the potential to result in a major boost to
demand, analysts say.
Write to Benjamin Parkin at benjamin.parkin@wsj.com
(END) Dow Jones Newswires
May 19, 2017 15:36 ET (19:36 GMT)
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