February 27, 2017 / 9:18 PM / 9 months ago

LIVESTOCK-CME live cattle futures score 10-month high on beef demand

    * Feeder cattle end sharply higher
    * Hog contracts gain modestly

    By Theopolis Waters
    CHICAGO, Feb 27 (Reuters) - Chicago Mercantile Exchange live
cattle futures        reached their highest since late April
2016, driven by short-covering amid brisk wholesale beef demand,
said traders.
    They said speculators bought deferred cattle contracts after
Friday's U.S. Department of Agriculture monthly Cattle-On-Feed
report proved less bearish than some had anticipated.
    February live cattle        , which will expire on Tuesday,
closed 1.625 cents per pound higher at 125.375 cents. Most
actively traded April         ended 0.550 cent higher at 115.500
    The morning's choice wholesale beef price surged $2.10 per
cwt to $201.06 from Friday. Select cuts climbed $1.61 to
$197.09, the USDA said.
    Cassandra Fish, author of industry blog The Beef, said
seasonal growth in slaughter-ready cattle supplies appears to be
met with robust demand, if sales to retail/food service
consumers continue to flourish at currently attractive wholesale
    "With Lent beginning this week, there is caution here as
well, but there is also optimism for post-Easter beef
clearance," said Fish.
    Much improved packer margins and wholesale beef values might
underpin this week's prices for slaughter-ready, or cash, cattle
that last week in the U.S. Plains brought $124 to $125 per cwt.
    Monday's average beef packer margins were at a negative
$20.20 per head, up from negative $33.85 on Friday, as
calculated by HedgersEdge.com.
    Live cattle futures gains and steady-to-higher cash feeder
cattle prices boosted CME feeder cattle futures.
    March feeders         closed 2.150 cents per pound higher at
123.850 cents.
    Nearby CME lean hogs were supported by their discounts to
the exchange's hog index for Feb. 23 at 77.39 cents, said
    They said weaker cash and wholesale pork values capped
market advances.
    April hogs         ended up 0.100 cent per pound to 68.125
cents, and May         closed up 0.050 cent to 74.025 cents.
    Monday morning's cash hog price in Iowa/Minnesota averaged
$71.58 per cwt in light sales volume, $1.59 lower than on
Friday, the USDA said.
    U.S. government data on Monday morning showed the average
wholesale pork price dropped 75 cents per cwt to $81.16 from
Friday, following $12.25 lower pork bellies. 
    Processors are waiting for pork belly prices to come down
before putting them into storage for later use, an analyst said.
    A Midwest hog merchandiser said packers may soon start
taking less money off cash bids as their margins improve.
    HedgersEdge calculated Monday's average pork packer margins 
at a positive $19.75 per head, up from a positive $11.25 on

 (Reporting by Theopolis Waters; Editing by James Dalgleish)

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