October 24, 2017 / 8:10 PM / in 10 months

LIVESTOCK-Cash price optimism buoys CME live cattle futures

    * Feeder cattle hit 3-month high
    * Lean hog market finishes higher

    By Theopolis Waters
    CHICAGO, Oct 24 (Reuters) - Chicago Mercantile Exchange live
cattle closed sharply higher on Tuesday, spurred by
short-covering in anticipation of steady-to-better cash prices
later this week, said traders.
    Fund buying contributed to advances after some contracts
topped technical resistance levels on their way to new highs.
    October         live cattle, which will expire on Oct. 31, 
finished 2.100 cents per pound higher at 113.625 cents. Most
actively traded December         closed up 2.775 cents to
119.525 cents.
    Both contracts ended above their respective 10-day moving
average of 112.135 and 117.140 cents.
    Market investors await the sale of market-ready, or cash,
cattle that a week ago brought $110 to $111 per cwt. They look
to Wednesday's Fed Cattle Exchange sale of less than 1,000
animals for cash price direction.
    Impressive packer profits and Tuesday's higher wholesale
beef prices are supportive cash price factors. And there are
fewer cattle on this week's show list, which reports the number
of animals available for sale.                  
    "This industry has been talking for six weeks that our show
list size was going to grow, and it has not grown at all. It's
gotten a little bit smaller," said KIS Futures vice president
Lane Broadbent.
    The smaller show list and lighter cattle weights suggest
feedlots are moving animals to market ahead of schedule, a move
that could result in fewer cattle later which helped drive up
deferred live cattle contracts.
    Broadbent worries that some back-month contracts above
119.000 cents per pound might encourage feedlots to feed cattle
longer, thereby creating a glut of heavier animals.
    Short-covering, technical buying and live cattle futures
advances boosted CME feeder cattle        to a three-month high.
    October        , which will expire on Thursday, ended 1.500
cents per pound higher at 155.125 cents. Most actively-traded
November         closed 3.400 cents higher at 156.125 cents.

    Tuesday morning's firmer cash and wholesale pork values sent
CME lean hogs higher, reversing some of Monday's declines, said
    Some speculative buyers bought deferred hog contracts,
lifting them to new highs, in anticipation of fewer animals
during that period.
    December         hogs finished up 0.500 cent per pound to 
64.025 cents, and February         ended 0.425 cent higher at
68.650 cents.
    Cash hog prices may be close to topping out after packers
paid up for supplies for more than three weeks driven by their
double-digit margins, good pork demand and an effort to maintain
market share, a trader said.                

 (Reporting by Theopolis Waters; Editing by James Dalgleish)
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