May 25, 2017 / 9:45 PM / 6 months ago

LIVESTOCK-Funds, bargain buying rallies CME live cattle futures

    * Feeder cattle up nearly 2 percent
    * USDA monthly cattle report on Friday
    * Hog futures firmer, some new highs

    By Theopolis Waters
    CHICAGO, May 25 (Reuters) - Chicago Mercantile Exchange live
cattle on Thursday reversed some of their recent losses, stirred
by fund buying and bargain hunting as the U.S. Memorial Day
holiday approaches, said traders.
    They said futures' discounts to this week's cash prices
attracted would-be buyers. 
    June         closed 1.800 cents per pound higher at 123.925
cents, and above the 10-day moving average of 123.140 cents.
August         closed 1.475 cents higher at 121.400 cents, and
above the 20-day moving average of 120.859 cents.
    A significant number of lighter weight cattle are available,
which is supportive for cash and wholesale beef prices, said
independent livestock futures trader Dan Norcini. 
    "And, the discount between cash and futures is too steep
given the light-weight or unfinished cattle that are out there,"
he said.
    This week packers paid mostly $132 per cwt for market-ready,
or cash, cattle in the U.S. Plains versus $133 to $134 last
week.
    Thursday afternoon's average wholesale beef price was up 3
cents per cwt to $246.11 from Wednesday. Select cuts dropped 62
cents to $218.98, the U.S. Department of Agriculture said.
    Packers need fewer cattle while preparing to close plants on
Monday's holiday. 
    Retailer resisted buying large amounts of meat until they
can gauge product movement over the holiday.
    Market participants adjusted positions before USDA's monthly
cattle-on-feed report on Friday.            
    Technical buying and live cattle futures' rebound boosted
CME feeder cattle nearly 2 percent.
    May         feeders, which expired at noon CDT (1700 GMT),
settled down 0.475 cent at 143.550 cents and near CME's feeder
cattle index for May 24 at 143.09 cents.
    Most actively traded August         ended 2.450 cents higher
at 151.125 cents, and September         2.150 cents higher at
150.975 cents.

    HIGHER HOG FUTURES CLOSE    
    Strong cash hog and wholesale pork prices sent CME lean hogs
higher, with some months reaching new highs, said traders.
    June         closed up 0.750 cent per pound to 80.950 cents,
and posted a fresh high of 81.075 cents. July         finished
0.725 cent higher at 80.575 cents.
    Thursday afternoon's average cash hog price in
Iowa/Minnesota was at $71.67 per cwt, $1.56 higher than on
Wednesday, USDA said.
    U.S. government data on Thursday afternoon showed the
average wholesale pork price up 44 cents per cwt from Wednesday
to $90.30.   
    "Beef prices are higher, but pork in comparison remains
cheap. And with the margins that packers are making, they can
afford to pay up for hogs," said Norcini.

 (Reporting by Theopolis Waters; Editing by Lisa Shumaker)
  

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