May 23, 2017 / 10:57 PM / in 6 months

LIVESTOCK-Hog futures gain, cattle ease on spread unwinding

    By Michael Hirtzer
    CHICAGO, May 23 (Reuters) - U.S. lean hog futures        
rose to a three-month high on Tuesday while live cattle        
declined as some investors unwound hog-cattle spreads, traders
and analysts said.
    Traders locked in profits on long cattle-short hog spreads,
with Chicago Mercantile Exchange live cattle declining for the
first time in four sessions and easing from a two-week peak. 
    Investors also were evening up positions ahead of the U.S.
Department of Agriculture monthly Cattle on Feed report due on
Friday. Analysts polled by Reuters expected the USDA to show
cattle placed on feed last month up slightly from a year ago.
    "There's a fair amount of the trade that's long cattle and
short hogs, and it's not a profit until you take it," said CHS
Hedging broker Steve Wagner.
    USDA data released on Monday showing U.S. pork belly stocks
of 34.045 million pounds in April - lowest ever for that month -
also bolstered lean hog futures, Wagner said.             
    "Pork bellies are down to a historic low, and that is at a
time demand will typically be strongest," he said.
    Retailers have been stocking up on meat cuts ahead of the
U.S. Memorial Day holiday on Monday, the unofficial beginning of
the summer outdoor grilling season.
    USDA data released after the close of trading showed higher
wholesale pork prices, including steep gains in pork bellies,
while wholesale beef prices declined.                    
    CME June lean hog futures        jumped 0.800 cent to 80.150
cents per pound and July hogs        eased 0.250 cent to 80.025
cents per pound. 
    CME June live cattle        were down 0.850 cent to 123.075
and August cattle        were off 0.700 cent to 121.325 cents,
while August feeder cattle        eased 1.275 cents to 151.500

 (Reporting by Michael Hirtzer in Chicago; Editing by Jonathan

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