--Hog futures mixed, face some pressure after early week
gains
--Cattle futures advance ahead of trade in the cash markets
--Technical buying after cattle futures hit multiweek low also
seen as supportive
By Kelsey Gee
CHICAGO--U.S. hog futures are mixed early in the session
Wednesday amid profit-taking, easing from gains this week as
traders search for signs of demand for cheaper pork products.
October lean hogs are up 0.12 cent to $1.0700 a pound at the
Chicago Mercantile Exchange. December hog futures recently slid
0.35 cent, or 0.4%, to 95.57 cents a pound.
Wholesale pork products have fallen sharply in price since
mid-July, enticing fresh buying from bargain-hunting grocery
stores, restaurants, and export buyers. This retail demand has
encouraged processors to bid more aggressively in the cash markets
for available hogs.
The cash market uptick has, in turn, underpinned fresh gains in
the futures market, and analysts said Wednesday that profit-taking
was weighing on the nearby contracts as investors search for signs
of new demand.
Cattle futures, meanwhile, are rising ahead of trade in the cash
markets, fueled by technical buying after prices sank to a
multiweek low on Tuesday.
"The trend in cattle seems to be that if you give the market any
reason to rally people will hop on board," said Joe Hofmeyer, an
analyst with commodity brokerage CHS Hedging Inc. in Minnesota.
Investors "want to stay long this market because they know supplies
will be tight through 2015 and that the cattle herd will not be
rebuilding instantly," said Mr. Hofmeyer.
Abundant grass and pasture for grazing and the cheapest feed
costs in four years have given producers more incentive to hold
back more female breeding animals on the farm, rather than selling
them to be fattened for slaughter. This could have the long-term
effect of expanding the size of the nation's cattle herd from its
smallest since the 1950s, though temporarily restrains supplies of
market-ready animals available to processors for beef.
October live-cattle are up 1.025 cent to $1.57225 a pound.
Most-active feeder-cattle futures for October recently gained 2.42
cents to $2.2830 a pound.
Write to Kelsey Gee at kelsey.gee@wsj.com
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