Chicago | Reuters — Live cattle futures dropped 2.2 percent after hitting their highest level in 2-1/2 months on Thursday, snapping a three-day winning streak as a rebound in the U.S. dollar sparked a round of profit-taking.
“The pushback on the U.S. dollar maybe caught a few people off-guard,” said Rich Nelson, chief strategist with Allendale Inc.
Front-month Chicago Mercantile Exchange February live cattle finished down 2.95 cents at 122.475 cents/lb. (all figures US$). The front-month contract peaked at 126.025, its highest price since Nov. 6. Most-active CME April live cattle was off 2.55 cents at 122.6 cents.
Live cattle futures had posted higher closes in eight of the previous nine sessions, with open interest rising as funds and other investors placed new long bets.
A weakening U.S. dollar, which hit its lowest level since 2014 on Wednesday, had underpinned the rally. The dollar began the day weaker on Thursday but firmed after U.S. President Donald Trump told CNBC he ultimately wants the dollar to be strong, contradicting comments made by Treasury Secretary Steven Mnuchin one day earlier.
CME February lean hog futures were down 0.45 cent at 72.475 cents/lb. and most-active April hogs were 1.875 cents lower at 73.825.
CME March feeder cattle futures settled 2.475 cents lower at 143.925 cents/lb. The contract dropped below its 30-day, 40-day and 50-day moving averages.
— Reporting for Reuters by Mark Weinraub.