Chicago | Reuters — Chicago Mercantile Exchange live cattle futures hit one-week highs on Monday on technical buying and short covering, while lean hog futures tumbled, traders said.
The gains in cattle came after the market sank to a four-month low on Friday.
“This market is technically very oversold,” said Brian Hoops, president of broker Midwest Market Solutions. “There was a lot of short-covering that gave us these explosive gains during the trading session.”
CME October live cattle futures settled up 2.225 cents at 122.625 cents/lb., while the most-active December contract soared 2.85 cents to end at 128.05 cents. Both contracts reached their highest prices since Sept. 27 after falling on Friday to their lowest since June 1.
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Cash cattle bids of up to $124 per hundredweight in Kansas were supportive for the futures market, Hoops said. He added that traders will seek to narrow the gap between cash and futures prices, after the October contract closed at 120.4 cents/lb. on Friday.
Feeder cattle futures also climbed on Monday, with the most-active November contact ending up 2.125 cents at 155.025 cents/lb.
In export news, Chinese demand for U.S. beef has soared as Australian beef shipments to China wither amid diplomatic tensions.
Meanwhile, CME lean hog futures closed lower on Monday after rising last week on quarterly U.S. Department of Agriculture data released Sept. 24 that showed smaller-than-expected U.S. pig supplies.
CME October lean hogs settled down 1.5 cents at 90.8 cents/lb. on Monday. The most-active December contract slid 2.075 cents to end at 83.1 cents, after gaining 8.375 cents, or 11 per cent, last week.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.
