May 1, 2018 / 10:35 PM / 4 months ago

LIVESTOCK-Supply growth worries extend CME live cattle losses

    CHICAGO, May 1 (Reuters) - Chicago Mercantile Exchange live
cattle        finished lower for a second consecutive day on
Tuesday amid concerns about increased supplies ahead, said
traders.
    "Everybody keeps talking about this wall of cattle coming.
But, feedyards moved a lot of cattle ahead of schedule to avoid
lower prices later, which may ultimately create a hole in
supplies," a Plains feedlot manager said.
    Futures were undervalued compared to this week's cash price
outlook, which limited market losses and briefly lifted
contracts into positive trading territory.
    June         live cattle closed down 0.275 cent per pound at
 105.825, and August         ended 0.450 cent lower at 104.075
cents.
    On Tuesday a small number of slaughter-ready, or cash,
cattle in the U.S. Plains sold for $118 per cwt, down from
mostly $124 there last week. Other cattle in the state are
priced at $126, said feedlot sources.
    A week ago, overall cash cattle in the Plains brought $118
to $126.50.
    Investors await Wednesday's Fed Cattle Exchange auction of
2,982 animals.
    Market bulls look for steady-to-higher cash returns this
week given impressive packer margins and rising wholesale beef
values at the start of May National Beef Month.           
       
    Bearish traders contend that packers might resist paying
more for cattle knowing a supply buildup is looming.
     A walkout over a pay shift differential at a Cargill
Nebraska beef processing plant partially disrupted production at
the facility, a company spokesman said on Tuesday.              
 
    Lower live cattle futures and technical selling sank CME
feeder cattle. The contract drew more pressure from higher corn
prices that tends to increase input costs for feedlots.
    May         closed 2.275 cents per pound lower at 137.900 
cents.
    
    HOGS FINISH HIGHER
    Firmer cash hog and wholesale pork prices lifted CME hog
futures, said traders.
    A few traders bought hog futures and simultaneously sold
live cattle contracts, they said.
    May         closed up 1.150 cents per pound at 67.450 cents.
Most actively traded June         ended up 1.200 cents at 73.900
cents.
    Farmers actively planted corn and soybeans which slowed hog
supplies in parts of the Midwest, said traders and analysts.
         
    Grocers are advertising pork as warmer spring weather enters
parts of the country, stirring interest in cooking outdoors, a
trader said.           
    "The return of more spring-like temperatures across most of
the nation should finally kick start the pork demand train
especially with Mother’s Day and then Memorial Day fast
approaching," said independent livestock futures trader Dan
Norcini.

 (Reporting by Theopolis Waters
Editing by Tom Brown)
  
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