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LIVESTOCK-Cattle futures jump on technicals, China beef hopes
May 12, 2017 / 8:54 PM / in 5 months

LIVESTOCK-Cattle futures jump on technicals, China beef hopes

    By Michael Hirtzer
    CHICAGO, May 12 (Reuters) - Chicago Mercantile Exchange live
cattle futures         jumped about 2 percent on Friday, gaining
on technical buying and hopes that China could soon boost
imports of U.S. beef, traders and analysts said.
    Feeder cattle futures         surged 3 percent, rising by
their daily trading limit of 4.500 cents late in the session in
a rebound from declines earlier this week. The lower prices made
it profitable for feedlots to buy cattle for fattening,
prompting buying.
    "This is a market that was due for a correction to the
upside," said CHS Hedging analyst Steve Wagner. "Without the
massive liquidation by funds, it doesn't take much."
    Investment funds had sold off a portion of a record-large
net long in CME cattle futures during a roll in which investors
tracking the Standard & Poor's Goldman Sachs Commodity Index
          exited positions in June cattle and moved into
deferred months.
    CME June live cattle        settled up 1.250 cents at
125.175 cents per pound and August cattle        up 2.100 cents
to 121.775 cents per pound. 
    CME August feeder cattle were up 4.500 cents to 151.825
cents per pound. Trading limits will expand to 6.750 cents on
Monday after feeders finished limit-up on Friday, the CME Group
said on its website.   
    The higher futures came even as cattle traded at mostly $137
to $138 per cwt in the Plains this week, down from sales of $140
to $147 last week.
    Analysts said demand for cattle remained robust, with the
U.S. cattle slaughter running about 5.8 percent ahead of last
year and wholesale beef prices at the highest levels since 2015,
according to U.S. Department of Agriculture data.           
          
    U.S. Commerce Secretary Wilbur Ross late on Thursday said
China will begin allowing imports of U.S. beef no later than
July 16. U.S. meat trade groups have been pushing for China to
reopen its market to beef after a ban was imposed in 2003 due to
a case of bovine spongiform encephalopathy (BSE), or mad cow
disease.             
    CME June lean hog futures        were 0.900 cent higher to
77.950 cents per pound and July hogs        up 1.525 cents to
78.600 cents, tracking gains in cattle.
    "Hogs have been a follower all year, and that hasn't
changed," Wagner said.
    

 (Reporting by Michael Hirtzer in Chicago; Editing by Marguerita
Choy)
  

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