* Feeder cattle rally nearly 2 pct
* Lean hog contracts finish lower
By Theopolis Waters
CHICAGO, May 30 Chicago Mercantile Exchange live
cattle on Tuesday reversed some of their recent losses, helped
by short-covering and futures' discounts to this week's expected
cash prices, said traders.
They said some investors sold June futures and
simultaneously bought deferred months ahead of the first notice
day for June cattle deliveries on Monday.
June ended up 0.275 cent per pound to 122.975 cents,
and August 0.900 cent higher at 119.850 cents.
Some processors intend to build inventories for next week,
which is the first full week of production after the Memorial
Day holiday, said traders and analysts.
A trader said other packers may have bought enough cattle in
advance of Monday's holiday for delivery over the next week or
Overall, packers may try to avoid actively competing for
supplies if grocers heavily promote pork and chicken after
National Beef Month in May wraps up on Wednesday.
Market participants await Wednesday morning's Fed Cattle
Exchange sale of 2,067 animals. The average top price there last
week was $132.54 per cwt.
A week ago packers in the U.S. Plains bought
slaughter-ready, or cash, cattle for $132 to $133 per cwt. Cash
cattle there a week earlier fetched $133 to $134.
Tuesday morning's average wholesale beef price slipped 37
cents per cwt to $245.23 from Friday. Select cuts rose $1.39 to
$219.84, the USDA said.
Higher live cattle futures and lower corn prices rallied CME
feeder cattle by almost 2 percent.
August feeders ended 2.975 cents per pound higher,
or up 1.97 percent, to 149.925 cents.
HOG FUTURES RETREAT
Soft cash prices and profit-taking, after contracts spiked
to new highs last Friday, undercut CME lean hogs, said traders.
June led declines after investors sold that contract and at
the same time bought deferred months in a trading strategy known
as bear spreads.
June closed 1.325 cents per pound lower at 80.500
cents, and July down 0.900 cent to 81.000 cents.
Tuesday morning's average cash hog price in the western corn
belt was $71.91 per cwt in extremely light volume, down 32 cents
from Friday, USDA said.
A few packers bought enough hogs for the rest of the week,
but others might need supplies for a big post-holiday Saturday
kill, a trader said.
Solid packer profits, good pork demand and seasonally
declining supplies are incentives for processors to raise cash
hog bids in the near term, he said.
(Reporting by Theopolis Waters; editing by Diane Craft)