May 30, 2018 / 8:55 PM / in a year

LIVESTOCK-CME live cattle futures up 3-cent price limit

    CHICAGO, May 30 (Reuters) - Chicago Mercantile Exchange live
cattle on Wednesday settled up its 3-cents per pound daily price
limit, driven by short-covering and fund buying, traders said.
    They said CME live cattle garnered more support from higher
wholesale beef values and future's discount to early-week prices
for market-ready, or cash, cattle.
    June         and August         live cattle closed up
3.000-cents per pound at 106.125 and 104.450 cents,
respectively. Thursday's limit will expand to 4.500 cents.
    A few head traded at $110 per cwt at Wednesday's Fed Cattle
Exchange, consistent with last week's sale of a small number of
cash cattle in the U.S. Plains.
    Before the Memorial Day holiday some packers bought enough
supplies for the rest of this week, a trader said. But others
need cattle for next week, the first full post-holiday week of
production, he added.
    Grocers are restocking meat cases after the U.S. Memorial
Day holiday and in preparation for Father's Day on June 17, 
analysts and traders said.           
    It is risky to try selling futures at a sizable discount to
cash cattle trading around $110 per cwt while wholesale beef
prices moving higher, said Midwest Market President Brian Hoops.
    Speculators bought back-month CME cattle contracts with the
view that feedlots rushing livestock to market earlier than they
had planned may temper increased supplies ahead. 
    "There are still a lot of cattle coming at us ... but it
seems like we're able to absorb some of those big numbers," said
    CME feeder cattle        reached a three-month top on higher
live cattle futures and lower corn prices, which tends to reduce
input costs for feedlots.
    August         closed 3.350 cents per pound higher at
148.325 cents.
    CME hogs        hit a one-year high on technical buying and
upward-trending cash prices, said traders.
    And active cattle futures buying supported lean hog
contracts, they said.
    June         hogs closed 1.650 cents per pound higher at
77.325 cents. July         ended 1.275 cents higher at 80.125
cents, and above the 100-day moving average 79.814 cents.
    Packers competed for hogs whose numbers slowed down as hot
weather causes them to eat less feed, thereby delaying delivery
to packers.             
    "Weights coming down was positive for the hog market.
Anytime you take supply off the market, especially a pound and a
half off carcass weights, that's a pretty big move," said Hoops.

 (Reporting by Theopolis Waters)
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