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LIVESTOCK-CME live cattle end firmer despite cash price pessimism
April 5, 2017 / 8:24 PM / 7 months ago

LIVESTOCK-CME live cattle end firmer despite cash price pessimism

    By Theopolis Waters
    CHICAGO, April 5 (Reuters) - Chicago Mercantile Exchange
live cattle futures gained modestly on Wednesday, aided by their
discounts to this week's cash price expectations, said traders.
    They said sufficient supplies and seasonally tepid wholesale
beef demand capped market advances.
    April live cattle         closed up 0.050 cent per pound to
118.275 cents, and June         up 0.125 cent to 109.425 cents.
    Investors are unsure what to do, given possibly lower cash
prices while futures remain at a discount to those potential
cash returns, said JRS Consulting owner Jack Salzsieder.
    The lack of animal sales at Wednesday morning's Fed Cattle
Exchange reflected lack of packer interest in purchasing cattle
at higher prices.
    Nebraska packers responded by lowering bids for
market-ready, or cash, cattle from $124 to $122 per cwt with no
response from sellers. Kansas bids held at $125 against $130
asking prices there and in Texas.
    Last week most of the cash cattle in the U.S. Plains brought
$128 to $130 per cwt.
    There are more cattle for sale than last week and packers
have at their disposal a huge number of animals contracted
against the futures market.
    Two packing plants are scheduled to be offline later this
week for maintenance. Negative packer profits will also
discourage them from bidding up for supplies.
    Wednesday afternoon's average wholesale beef price slumped
$1.98 per cwt to $209.71 from Tuesday. Select cuts were up 12
cents to $200.51, the U.S. Department of Agriculture said.
    CME feeder cattle were pressured by lower cash feeder cattle
prices, but supported by slight live cattle market gains.
    April feeder cattle         closed 0.500 cent per pound 
lower at 130.525 cents, and May         up 0.125 cent to 130.425

    Bearish market fundamentals pressured CME April lean hogs
and prompted investors to sell that contract and simultaneously
buy deferred months, said traders.
    April hogs         ended down 0.050 cent per pound to 63.625
cents, and May         closed up 0.175 cent to 68.350 cents.
    A seasonal supply bump has pressured cash prices and could
drag down wholesale pork values in the coming weeks, said
traders and analysts.
    Wednesday afternoon's average cash hog price in
Iowa/Minnesota at $60.94 per cwt declined 23 cents from Tuesday,
the USDA said.
    U.S. government data on Wednesday afternoon showed the
average wholesale pork price at $74.87 per cwt, down 63 cents
from Tuesday.
    USDA estimated Monday through Wednesday's total hog
slaughter at 1.333 million head, 34,000 more than a year ago.

 (Reporting by Theopolis Waters; Editing by James Dalgleish)

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