May 21, 2018 / 9:51 PM / in a year

LIVESTOCK-Cattle surge on technical buying, packer demand

    By Michael Hirtzer
    CHICAGO, May 21 (Reuters) - Cattle futures jumped the most
in more than a month on Monday, buoyed by technical short
covering and optimism that demand from beef packers that
resulted in last week's large cattle slaughter will continue
this week, traders and analysts said.
    Front-month June live cattle futures        briefly rose by
their daily 3.000-cent price limit, before settling up 2.525
cents at 104.925 cents per pound while the most-active August
contract        ended 2.400 cents higher at 100.625 cents.
    The June contract's percentage gains of 2.7 percent were the
largest since April 4 and followed a nearly 5 percent weekly
drop last week.
    August feeder cattle futures        were up 2.875 cents at
140.500 cents per pound.
    Some traders were exiting short bets ahead of a monthly U.S.
cattle supply report due on Friday and the three-day U.S.
Memorial Day holiday weekend. Commodity Futures Trading
Commission data released last week showed speculative investors
adding new short bets and cutting long positions.             
    The cattle slaughter of 660,000 head last week was up from
the same week in 2017 of 612,000 head, and the year-to-date
slaughter is up 2.8 percent from last year, according to the
U.S. Department of Agriculture.           
    "Not many guys want to hold sizable short positions ahead of
a long weekend," said Top Third Ag Marketing analyst Craig
VanDyke. "We've had some monster kills the last two weeks and
the (beef) product has been moving very well."
    Increased slaughter suggested packers were enjoying robust
demand for beef. Sales of beef and other meats typically spike
in the summer, when more U.S. consumers cook on outdoor grills.
    News of easing trade tensions between the United States and
China also underpinned cattle prices, even though China was
unlikely to significantly boost its imports of U.S. beef, the
analysts said.
    Hog futures were lower at the Chicago Mercantile Exchange,
pressured by technical selling and despite hopes that China
could eliminate a tariff on imports of U.S. pork.
    Chicago Mercantile Exchange June lean hogs        were down
0.700 cent at 74.000 cents per pound, the lowest since May 7.
The contract could test its lifetime lows reached early in
April, VanDyke said.

 (Reporting by Michael Hirtzer in Chicago
Editing by Matthew Lewis)
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