August 18, 2017 / 7:34 PM / a year ago

LIVESTOCK-CME live cattle again sink to 9-month bottom, but off lows

    * Feeder cattle closes mixed
    * Hogs down for third straight day

    By Theopolis Waters
    CHICAGO, Aug 18 (Reuters) - Chicago Mercantile Exchange live
cattle futures        pared losses on Friday after falling to
its lowest level in 9 months, led by this week's steep cash
price drop and seasonally downward-trending wholesale beef
values, said traders.
    Bargain buying and traders covering their short positions
lifted contracts from session lows, and futures remained
bullishly undervalued, or discount, to this week's
slaughter-ready, or cash, prices.
    "The discount is providing some support. But weaker beef
prices and the prospect for larger slaughter numbers ahead are
going to keep sellers active," said independent CME livestock
futures trader Dan Norcini.
    August         ended 0.750 cent per pound lower at 106.375
cents, and October         closed down 0.325 cent to 105.900
    This week packers in the U.S. Plains paid $109 to $110 per
cwt for cash cattle that a week ago brought $114 to $116.
    Processors resisted paying more for supplies, with grocers
continuing to wait for cheaper beef prices at wholesale as more
supplies of heavier cattle come to market.                     
    Investors are following ongoing U.S. North American Free
Trade Agreement re-negotiations with Mexico and Canada - both
are major U.S. livestock and meat trading partners.             
    Nonetheless, the prospect that futures are technically over
sold, and retailers needing beef for Labor Day holiday
advertisements, continue to pique the interest of potential
    CME August feeder cattle benefited from short-covering, but
the September contracts was pressured by softer live cattle
    August feeders         closed up 0.025 cent per pound to 
140.500 cents. September         finished 0.700 cent lower at
140.025 cents.
    CME lean hogs        fell for a third consecutive session,
pressured by sell stops and slumping cash prices amid a seasonal
supply growth, said traders.
    Investors sold October futures and simultaneously bought
deferred months in a trading strategy known as bear spreading.
    October         ended 0.800 cents per pound lower at 66.125
cents, and December         finished down 0.475 cent to 61.325
    Farmers are rushing hogs to market before they had planned
to avoid potentially lower prices in advance of increased
supplies ahead based on recent U.S. Department of Agriculture
    Unseasonably cooler temperatures in parts of the Midwest
allowed hogs to grow quicker, making them more readily available
to processors.          
    Friday morning's average wholesale pork price gained more
than $1 per cwt, after sharply higher prices for pork bellies
offset the steep drop in rib costs.            

 (Reporting by Theopolis Waters; editing by Diane Craft)
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