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LIVESTOCK-CME lean hog futures snap back from session lows
March 23, 2017 / 7:59 PM / in 9 months

LIVESTOCK-CME lean hog futures snap back from session lows

    * Live cattle settles lower
    * Feeder cattle ends weaker

    By Theopolis Waters
    CHICAGO, March 23 (Reuters) - Chicago Mercantile Exchange
lean hog futures finished higher on Thursday, after
short-covering and bargain buying brought contracts from morning
lows, traders said.
    "Hogs (futures) were simply too cheap. The price had gotten
to the point where (investors) had wrung out any sort of spring
seasonal rally," said independent CME livestock futures trader
Dan Norcini.
    Futures later garnered more support from technical buying
that replaced initial selling following lower cash and wholesale
pork prices.
    Wednesday morning's average cash hog price in Iowa/Minnesota
was $66.54 per cwt, down $1.59 from Tuesday, the U.S. Department
of Agriculture said.
    Separate USDA data on Wednesday morning showed the average
wholesale pork price down $1.21 per cwt to $77.83 from Tuesday,
following $5.02 lower pork belly prices.
    Packer inventories are full for the week, but they want to
process as many hogs as possible given their profitable margins,
a Midwest hog dealer said.
    An analyst said pork belly prices have to come down to
encourage product storage for summer use.
    April hogs         ended 1.200 cents per pound higher at 
69.350 cents, and above the 10-day and 40-day moving average
convergence level of 69.240 cents. May         closed up 1.425
cents to 73.950 cents, and above the 10-day moving average of  
73.933 cents.
    Profit-taking and trepidation before Friday's USDA monthly
Cattle-On-Feed report pulled CME live cattle futures down from
morning highs, said traders.
    Analysts, on average, expect Friday's report to show fewer
cattle were placed in U.S. feedlots last month than a year ago.
    April live cattle         closed down 0.675 cent per pound
to 121.775 cents, and June         finished 0.975 cent lower at
112.800 cents.
    Wednesday's Fed Cattle Exchange cash price of $133.35 per
cwt, up nearly $5 from last week, encouraged sellers elsewhere
in the U.S. Plains to hold out for more money.
    Slaughter-ready, or cash, cattle bids in Texas and Kansas
were at $126 and $133 per cwt in Nebraska versus up to $134
asking prices, said feedlot sources. Cash cattle in the U.S.
Plains last week brought mostly $128 to $131.
    Areas of tight cattle supplies, generally good wholesale
beef demand and triple-digit packer profits bode well for cash
prices, a trader said.
    Nonetheless, market participants are aware of a potential
seasonal supply increase soon, he added.
    CME feeder cattle bowed to profit-taking and live cattle
futures losses. 
    March feeder cattle         ended down 0.300 cent per pound
at 133.700 cents.

 (Reporting by Theopolis Waters; Editing by Leslie Adler)

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