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LIVESTOCK-Initial cash prices drop CME live cattle futures
February 8, 2017 / 10:12 PM / in 10 months

LIVESTOCK-Initial cash prices drop CME live cattle futures

    * Feeder cattle end sharply lower
    * Hog contracts close mostly weaker

    By Theopolis Waters
    CHICAGO, Feb 8 (Reuters) - Chicago Mercantile Exchange live
cattle futures finished lower on Wednesday, pressured by softer
wholesale beef values and some preliminary cash prices that fell
short of expectations, traders said. 
    They said sell stops and fund liquidation compounded market
losses.
    February live cattle         closed 0.900 cent per pound
lower at 116.775 cents, and April         1.750 cents lower at
114.750 cents.
    Both contracts fell below where their respective 10-day and
40-day moving averages converged at 116.974 and 115.557 cents.
    Wednesday morning's choice wholesale beef price slipped 15
cents per cwt to $189.81 from Tuesday. Select cuts fell $1.03 to
$186.75, the U.S. Department of Agriculture said.
    On Wednesday, 3,600 animals at the Fed Cattle Exchange (FCE)
on average brought $117.50 per cwt versus last week's $119
average. But the high end of the sales range there was $120.50. 
    After the futures market closed, slaughter-ready, or cash,
cattle traded at $120 per cwt in Kansas and Texas, up from $119
in the U.S. Plains a week ago.
    The $120 per cwt Plains trade is fairly consistent with the
high end of FCE's results, said CHS Hedging analyst Steve
Wagner.
    "The key is if somebody blinks and pays $120 in Nebraska
because it was at the low end of the FCE range of $115," he
said.
    Tight packer inventories stirred competition for supplies at
a time when processors are grappling with extremely poor
margins.
    CME feeder cattle followed live cattle futures lower.
    March feeders         closed down 1.925 cents per pound at
122.300 cents.
   
    MOSTLY WEAKER HOG FUTURES
    Firmer cash and wholesale pork prices lifted CME February
lean hogs to a fresh contract high, traders said.
    But, they said, profit-taking and technical selling
pressured other trading months.
    February hogs        , which will expire on Feb. 14, ended
0.975 cent per lb higher at 73.350 cents, and hit a new contract
high of 73.450 cents.
    Most actively traded April         closed 0.450 cent lower
at 71.725 cents, and May         finished down 0.275 cent to
75.725 cents. 
    Wednesday morning's cash hog price in Iowa/Minnesota
averaged $69.33 per cwt, 62 cents higher than on Tuesday, the
USDA said.
    Separate U.S. government data showed the average wholesale
pork price, or cutout, up 31 cents per cwt to $85.69 from
Tuesday, mostly led by $1.36 higher pork bellies.
    The pork cutout was led by speculation regarding a bacon
shortage, which is not the case given plentiful supplies, said
CHS Hedging's Wagner.

 (Reporting by Theopolis Waters; Editing by Dan Grebler)
  

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