August 30, 2017 / 8:35 PM / 24 days ago

LIVESTOCK-Short covering, bargain buying boosts CME hog futures

    * Live cattle rise slightly
    * Feeder cattle end higher

    By Theopolis Waters
    CHICAGO, Aug 30 (Reuters) - Chicago Mercantile Exchange lean
hog futures        closed higher on Wednesday after bargain
buyers and investors covering short positions reversed Tuesday's
slide to an 8-1/2 month low, traders said.
    Prior to Wednesday's session CME hogs        had a relative
strength index (RSI) reading of 17. An RSI below 30 suggests a
market is technically oversold and due for an upward correction.
    October         ended 1.125 cents per pound higher at 61.350
cents, and December         finished up 1.050 cents at 57.200
cents.
    Lean hog futures rose in the face of weaker wholesale pork
values and lower prices for slaughter-ready, or cash, hogs as
supplies build seasonally.                    
    "There is too much pork and packers are having a hard time
finding a home for it. Also hog numbers are starting to ramp up,
with weights increasing rather strongly," said Linn Group
analyst John Ginzel.          
    Cash prices were further pressured by packers needing fewer
hogs as plants prepare to shut down during the U.S. Labor Day
holiday.
    
    LIVE CATTLE GAIN MODESTLY
    CME live cattle finished moderately higher on short covering
while digesting early-week cash prices and recent wholesale beef
price firmness, said traders.
    August live cattle        , which will expire on Thursday,
ended 0.300 cent per pound higher at 105.550 cents. Most
actively traded October         finished up 0.025 cent at  
106.125 cents.
    A small number of animals at Wednesday's Fed Cattle Exchange
sold at $105 per cwt. Cash cattle last week in the U.S. Plains
brought $106 to $107.
    Feedlots priced remaining cash cattle in the Plains at $108
to $110 with no response bid-wise from packers.
    Processors seem satisfied with the current supply situation
heading into next week's holiday-shortened work week that could
disrupt the flow of product to grocers - which helped shore up
wholesale beef prices, a trader said.           
    Cattle feeders will resist taking less money for their
animals knowing packers are operating their plants with
phenomenal margins, he said.        
    Market participants continue to track Tropical Storm Harvey
             which is forecast to bring showers to the Ohio
Valley eastward over the three-day grilling holiday weekend,
which could hurt meat demand in the region.
    Technical buying, modest live cattle futures advances and
higher cash feeder cattle prices lifted CME feeder cattle
contracts.
    August feeders        , which will expire Thursday, closed
up 0.300 cent per pound at 142.900 cents. Most actively traded
September         closed 0.725 cent higher at 143.750 cents.

 (Reporting by Theopolis Waters; Editing by Matthew Lewis)
  

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