June 2, 2017 / 9:12 PM / 3 months ago

LIVESTOCK-CME live cattle futures climb to 1-month top

    * Feeder cattle highest in 15 months
    * Hog contracts finish mostly weaker

    By Theopolis Waters
    CHICAGO, June 2 (Reuters) - Chicago Mercantile Exchange live
cattle contracts        hit a one-month high on Friday, driven
by fund buying and short-covering, said traders.
    Futures' discounts to this week's better-than-anticipated
cash prices generated more buying.
    June         closed 3.400 cents per pound higher at 1s
30.825 cents, and August         1.350 cents higher at 126.050
cents.
    Live cattle's trading limit will return to 3.000 cents on
Monday after failing to settle up/down the 4.500-cent expanded
limit on Friday.
    Packers this week paid mostly $134 to $137 per cwt for
market-ready, or cash, cattle in the U.S. Plains that last week
brought $132 to $133.
    Insufficient processor inventories and impressive profits
emboldened cattle sellers to hold out for more money for their
livestock.
    Wholesale beef demand fared relatively well despite the end
of National Beef Month in May and plentiful competitively priced
pork. 
    Bearish traders periodically sold futures betting that beef
and cash cattle prices would fall sharply, which resulted in
large unjustified discounts to current cash returns, said Oak
Investment Group President Joe Ocrant.
    "It just does not happen, and those that have traded on the
coming break (decline) have had to cover their short positions,"
he said.    
    Friday afternoon's average wholesale beef price was down 34
cents per cwt to $245.24 from Thursday. Select cuts rose 84
cents to $218.06, the U.S. Department of Agriculture said.
    CME feeder cattle        hit its highest level since March
10, 2016 led by live cattle futures gains.
    August feeders         ended 1.650 cents per pound higher at
158.725 cents. CME's feeder cattle will resume its normal
4.500-cent limit after not settling up/down Friday's 6.750-cent
expanded limit. 

    MOSTLY WEAKER HOG FUTURES CLOSE    
    Traders sold deferred CME lean hog futures and at the same
time bought the June contract that will expire on June 14, said
traders.
    Profit taking and soft cash prices capped June advances and
further weighed on other contracts.
    June         closed up 0.300 cent per pound at 81.225 cents.
July         ended down 0.150 cent at 81.975 cents, and August
        0.300 cent lower at 81.700 cents.
    Friday afternoon's average cash hog price in Iowa/southern
Minnesota was $73.96 per cwt, 49 cents lower than on Thursday,
the USDA said.
    Packers may have cut cash bids after buying enough hogs
through early next week, a trader said. 
    However, processors may soon raise bids given their
profitable margins, good pork demand and seasonally tightening
supplies, he said.

 (Reporting by Theopolis Waters; Editing by Jonathan Oatis)
  

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