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LIVESTOCK-Short covering lifts CME live cattle futures
July 14, 2017 / 9:01 PM / 5 months ago

LIVESTOCK-Short covering lifts CME live cattle futures

    * Feeder cattle hit 1-month high
    * Hog contracts end sharply lower

    By Theopolis Waters
    CHICAGO, July 14 (Reuters) - Chicago Mercantile Exchange
live cattle contracts closed higher on Friday, aided by short
covering and futures' discounts to this week's
better-than-expected cash prices, said traders.
    CME livestock market funds that follow the Standard & Poor's
Goldman Sachs Commodity Index           sold, or "rolled,"
August futures and simultaneously bought October on the fifth
and final day of the Goldman Roll process.
    August         ended up 0.375 cent per pound at 117.800
cents, and October         was 0.750 cent higher at 118.575
    This week the bulk of market-ready, or cash, cattle in the
U.S. Plains traded from $118 to $120 per cwt, as much as $3
higher than last week, said feedlot sources. 
    Traders reacted to higher cash prices, which was surprising
for this time of year given the seasonal decline in wholesale
beef values, said CME livestock futures trader Dan Norcini.
    The U.S. Department of Agriculture's daily price, or cutout,
for choice wholesale beef cuts had fallen to $209.35 per cwt on
Friday afternoon from $251.03 a month earlier.           
    Consumers hold fewer cookouts during periods of extremely
hot weather, and retailers tend to feature less meat for
grilling after the U.S. Memorial Day holiday, said analysts and
    This week's combination of higher cash returns and eroding
wholesale beef prices wore down profits for packers, likely
making them think twice about paying up for cattle next week, a
trader said.        
    Buy-stops and live cattle futures gains boosted CME's feeder
cattle contract        to a one-month high.
    August feeders         ended 1.250 cents per pound higher at
154.275 cents.
    Fund liquidation and lower cash prices amid ample supplies
undercut CME lean hogs, said traders.
    The roll by funds further pressured August futures and
slowed the October contract's decline.
    July        , which will expire on Monday, ended down 0.150
cent per pound at 92.600 cents.
    Most-actively traded August         finished 2.625 cents
lower at 79.900 cents, and below the 40-day moving average of
80.996 cents. October         ended 2.150 cents lower at 67.175
cents, and below the 100-day moving average of 67.356 cents.
    Despite futures' bullish discounts to current cash prices,
packers anticipate having more hogs at their disposal to
accommodate two new processing plants that are slated to open in
September, a trader said. 
    Any delay in those facilities coming online, at a time of
increased supplies, will create major headaches for farmers and
cash prices, he added.     

 (Editing by Matthew Lewis)

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