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LIVESTOCK-Cattle hit 2-week high on cash discount, bear-spreading
May 22, 2017 / 9:51 PM / 6 months ago

LIVESTOCK-Cattle hit 2-week high on cash discount, bear-spreading

    By Michael Hirtzer
    CHICAGO, May 22 (Reuters) - U.S. live cattle futures        
extended gains to a nearly two-week high on Monday, lifted by
bear-spreading and futures' discount to trades in the cash steer
market, traders said.
    Feeder cattle futures         jumped 2 percent and lean hog
futures         hovered near three-month highs while wholesale
beef and pork prices climbed ahead of the U.S. Memorial Day
holiday on May 29, the unofficial start of summer outdoor
grilling season.                    
    Chicago Mercantile Exchange June live cattle futures       
settled 0.475 cent higher at 123.925 cents per pound. Most
active August cattle        gained 0.975 cent to 122.025 cents. 
    Speculative investors who were holding a massive long in
cattle futures sold June and bought August futures, the traders
said. The June contract goes into delivery next month and the
contract was trading at a roughly 10-cent discount to equivalent
cash cattle trades last week of mostly $134 per cwt.
    "That's what is holding this thing together, futures'
discount to the cash," said Don Roose, president at brokerage
U.S. Commodities. "We're trying to mark time to see what happens
in the cash market."
    Cash cattle prices have declined for weeks, as retailer
demand for beef started to slow ahead of the Memorial Day
holiday, when grocers often put meat on sale to entice buyers
having outdoor barbecues.
    But declining U.S. cattle weights and higher wholesale beef
prices have supported futures even as cash cattle declined. Cash
cattle deals likely will not develop until midweek, the traders
    The U.S. Department of Agriculture after the close of
trading said frozen beef in cold storage totaled 458.45 million
pounds by the end of April, down from 464 million in March. Pork
stocks grew to 599.112 million pounds, up from 549.424 million
pounds a month ago.             
    CME feeder cattle futures        were up 2.325 cents to
152.775 cents per pound, highest in a week.
    CME June hog futures        edged 0.150 cent lower to 79.350
cents per pound and most active July hogs        were down 0.125
cent to 80.050 cents, while most deferred contracts were
narrowly higher.
    Hogs in the top cash market of Iowa and southern Minnesota
eased 51 cents to an average price of $71.64 per cwt.         

 (Reporting by Michael Hirtzer in Chicago; Editing by James

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