May 31, 2017 / 8:34 PM / in 6 months

LIVESTOCK-Fund buying extends CME live cattle futures gains

    * Feeder cattle up 3rd straight session
    * Lean hog contracts notch fresh highs

    By Theopolis Waters
    CHICAGO, May 31 (Reuters) - The previous session's Chicago
Mercantile Exchange live cattle advances carried over into
Wednesday, with support from fund buying and short-covering on
the final trading session of the month, said traders.
    Futures' discounts to this week's initial cash prices
provided additional market support, they said. 
    June         ended up 1.450 cents per pound to 124.425
cents. August         finished 1.850 cents higher at 121.700
cents and surpassed the 20-day moving average of 120.833 cents.
    Wednesday morning's Fed Cattle Exchange yielded an average
top price of $132.24 per cwt, down modestly from last week's
$132.54 average high.
    Last week packers paid $132 to $133 per cwt for
slaughter-ready, or cash, cattle in the Plains that brought $133
to $134 the previous week.
    A few packers may need cattle for the first full week of
production after the Memorial Day holiday, a trader said.
Extremely high packer profits, and beef demand not falling
apart, is supportive for cash prices, he said.
    Wednesday afternoon's average wholesale beef price rose 29
cents per cwt to $245.54 from Tuesday. Select cuts fell $1.27 to
$218.18, the U.S. Department of Agriculture said.
    The average beef packer margins on Wednesday were a positive
$158.55 per head, up from a positive $142.10 last week, as
calculated by
    "If beef demand in June supports packer margins as well as
it is today, then packer demand for slaughter cattle ought to
continue solid as well," said Cassandra Fish, author of 
industry blog The Beef.
    Technical buying and additional CME live cattle futures
buying lifted the exchange's feeder cattle contracts for a third
consecutive session.
    August feeders         ended 2.650 cents per pound higher at
152.575 cents.

    CME lean hogs reversed Tuesday's selloff, helped by
short-covering and Wednesday morning's wholesale pork price
rebound that lifted contracts to new highs, said traders.
    They said profitable packer margins and good pork demand
during the summer grilling season could bode well for cash
prices in the near term.
    June         closed 1.425 cents per pound higher at 81.925
cents, and made a new high of 82.675 cents. July         ended
2.025 cents higher at 83.025 cents, and posted a fresh high of
83.350 cents.
    U.S. government data on Wednesday afternoon showed the
average wholesale pork price up 87 cents per cwt from Tuesday to
    Wednesday afternoon's average cash hog price in
Iowa/southern Minnesota was $73.07 per cwt, $1.27 higher than on
Tuesday, USDA said.

 (Reporting by Theopolis Waters; Editing by Dan Grebler)

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