May 9, 2018 / 9:26 PM / a year ago

LIVESTOCK-CME live cattle prices buckle under big supply worries

    CHICAGO, May 9 (Reuters) - Chicago Mercantile Exchange live
cattle        prices on Wednesday felt pressure from softer
wholesale beef prices and concerns about a looming supply build
up, traders said.
    Future's steep discount to this week's expected prices for
slaughter-ready, or cash, cattle limited June market losses,
they said.
    June         live cattle closed down 0.625 cent per pound 
at 105.675 cents. August         ended 1.100 cents lower  at
103.375 cents.
    Grocers resisted paying more for beef at wholesale after
prices rose for six straight sessions fueled by improved spring
grilling weather in the Midwest, said traders and analysts.
    Retailers may soon purchase more beef at lower prices as
they gear up for the U.S. Memorial Day holiday, they said.
    Invertors were divided about this week's potential cash
price outcome given historically high packer margins and
increased supplies ahead.        
    Packers in the U.S. Plains posted $120 per cwt bids for cash
cattle that were priced at $127 to $128 in Kansas. A few cattle
moved in Nebraska at $119 to $121, down from $123 to $126 there
last week.  
    No cattle were sold at Wednesday's Fed Cattle Exchange
    Possible $120 to $122 cash sales could rally futures because
it would confirm to some that the market may have peaked 
seasonally, said Top Third Ag Marketing broker Jeff French.
    "We know during the next 60 or 90 days that there are going
to be a tremendous amount of cattle that we have to work
through. The question is what's demand going to be?," said
    Weaker CME live cattle futures and steady-to-lower cash
feeder cattle prices undercut the exchange's feeder cattle
    May         closed down 0.575 cent per pound at 137.150 
    Most CME lean hog contracts finished moderately lower on
profit-taking and futures' premiums to the exchange's hog index
for May 7 at 63.33 cents, said traders.
    Wednesday's higher cash and wholesale pork prices mitigated
market losses and lifted June into bullish trading territory,
they said.
    May         closed 0.275 cent per pound lower at 65.925
cents. Most actively traded June         ended up 0.275 cent at 
76.575 cents. July         closed down 0.125 cent at 77.600
    Packers raised hog bids guided by increased pork demand and
tight supplies as some farmers concentrate on spring planting,
said traders and analysts.
    Retailers are willing to feature plentiful
competitively-priced pork and chicken following the recent run
up in wholesale beef prices, they said.         

 (Reporting by Theopolis Waters)
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