By Theopolis Waters
CHICAGO, June 28 (Reuters) – Chicago Mercantile Exchange hog futures dropped on Friday pressured by profit taking and sharply lower Chicago Board of Trade corn futures, traders and analysts said.
CBOT corn spiraled downward in response to larger-than-expected U.S. Department of Agriculture acreage estimates.
Cattle and hog producers may feed more livestock and fatten them to heavier weights if corn becomes more affordable.
Anticipation of cash hog and wholesale pork prices topping out contributed to hog futures’ losses.
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CME hogs in after-hours trading are poised to finish the month up more than six percent and gain nearly 26.0 percent for the quarter.
Pit-traded CME July hogs settled down 0.700 cent per pound to 101.275 cents. August closed at 97.450 cents, or 1.950 cents lower.
Investors await USDA’s quarterly hog report on Friday at 2 p.m. CDT.
Analysts expect the report to show the U.S. hog herd likely grew modestly in the March-May quarter as feed costs subsided.
CATTLE BOW TO DELIVERIES, SPREADS
CME live cattle posted losses with deliveries sending spot-June down by its three-cents daily price limit before it expired at noon CDT, analysts and traders said.
August live cattle, the new lead contract, buckled as traders sold the contract and bought deferred months.
And some investors sold far live cattle months as corn prices tumbled.
Live cattle at the CME are set to end down almost 3.0 percent for the month and over 8.0 lower for the quarter.
Spot June settled down 3.000 cent per lb. to 118.150 cents.
Most-actively traded August closed 0.900 cent lower at 122.025 cents.
Futures faded despite steady cash cattle prices. Processors kept a floor beneath cattle after buying sparingly in recent weeks.
But packers were hesitant to spend more than they had to for supplies with plants scheduled to be dark at least one day for the U.S. July 4th holiday.
Cash cattle in Texas and Kansas moved at $120 per hundredweight which was roughly steady with a week ago, said feedlot sources.
Lower CME live cattle and profit taking undercut feeder cattle futures.
CME feeder cattle were up almost four percent for the month and more than 10 percent increase for the quarter.
August settled down 0.250 cent per lb. to 149.450 cents. September was at 151.600 cents, or 0.225 cent lower.
