January 5, 2018 / 11:31 PM / 6 months ago

LIVESTOCK-CME cattle drop daily limit on lower cash market sales

    By Karl Plume
    CHICAGO, Jan 5 (Reuters) - Chicago Mercantile Exchange live
cattle futures         fell sharply on Friday and hit daily
trading limits on weaker cash market prices and easing concerns
that frigid weather in feedlot areas could disrupt marketings.
    Fund selling, or "rolling," of lead-month positions into
deferred months ahead of similar moves early next week added
pressure.
    Monday will be the first of five days that funds in CME's
livestock markets, which track the Standard & Poor's Goldman
Sachs Commodity Index          , roll February long positions
primarily into the April and June contracts.
    CME February live cattle futures         ended down the
daily 3.000-cent limit at 119.250 cents per pound. April        
also traded limit-down but settled 2.975 cents lower at 120.850
cents.
    The live cattle trading limit will be expanded to 4.500
cents on Monday following February's limit-down settlement, per
exchange rules.
    Cash cattle at Texas and Kansas feedlot markets traded at
$122 per cwt lower on Friday, down $1 from a week ago and below
early-week expectations for cash sales of at least $125.
    Worries about slowed beef demand along the heavily populated
East Coast also weighed on futures. The region was pummeled by a
winter storm this week, fueling fears of reduced restaurant
traffic and weaker demand at grocery stores.
    Meanwhile, concerns about slower weight gains among Plains
feedlot cattle due to a cold snap eased as temperatures in the
region turned milder by Friday.
    "We got hit with a double barrel, with fear that demand
could slow with the East Coast storms and with the weather in
cattle country now rebounding," said Don Roose, president of
U.S. Commodities.
    Feeder cattle futures         followed live cattle lower,
with losses propelled by technical selling.
    January feeders         settled down 2.400 cents per pound
at 146.625 cents and actively traded March         ended down
3.575 at 141.975 cents.
    CME lean hog futures         ended mixed, with nearby
contracts underpinned by strong cash markets and deferred months
pressured by rising hog supplies.
    Cash hogs in the closely followed Iowa and southern
Minnesota market traded $1.60 higher on Friday after gaining
$4.14 over the previous two days, according to U.S. Department
of Agriculture data.         
    February         hogs settled up 0.050 cent per pound at
71.425 cents. April         ended down 0.025 cent at 76.075
cents.

 (Reporting by Karl Plume; Editing by James Dalgleish)
  
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