June 1, 2018 / 9:40 PM / 2 months ago

LIVESTOCK-Bargain buying and short-covering lift CME hogs

    CHICAGO, June 1 (Reuters) - Chicago Mercantile Exchange hog
futures settled higher on Friday, with support from bargain
buying and short-covering heading into the weekend, said
traders.
    CME June hog futures led gainers after investors bought that
contract and simultaneously sold deferred months in a trading
strategy known as bull spreads, they said.
    June         hogs closed 0.975 cents per pound higher at
77.600 cents. July         ended 0.750 cents higher at 78.800
cents.
    Cash hog prices rallied for nearly a week after hot weather
in parts of the U.S. Midwest slowed animal weight gains,
delaying delivery to packers, said traders and analysts.
        
    On Friday, some investors bought futures after digesting
Thursday's news of a potential trade war after the United States
imposed tariffs on metal imports from Canada and Mexico. 
    Mexico retaliated with immediate duties on some U.S. pork
products. By volume, Mexico is the top importer of U.S. pork,
according to industry analysts.
    Friday's weaker wholesale pork values, along with future's
premiums to cash prices, tempered CME hog market advances, said
traders and analysts.           
    
     CATTLE FUTURES MOVE LOWER  
     CME live cattle drew pressure from technical selling and
expectations of larger supplies in the weeks ahead, said
traders.
     "As each week goes by in June, the calendar will take the
industry into the heart of one of the most well-advertised
'walls' of market-ready cattle in memory," said Cassandra Fish,
author of industry blog The Beef.
     Future's discounts to this week's prices for market-ready,
or cash, cattle limited front-month losses, traders said.
     This week packers paid mostly $110 per cwt for cash cattle
in the U.S. Plains, which was nearly consistent with last week's
sales. 
     Retail and restaurant featuring of beef for Father's Day
could help stabilize the cash price decline in recent weeks, a
trader said. Packers are operating plants with record-high
margins, which might encourage them to pay more for cattle next
week, he said.                       
    June         live cattle closed down 0.150 cent per pound at
104.900 cents. August         ended down 0.325 cent at 103.625
cents. 
     Technical selling and lower back-month CME live cattle
futures dropped the exchange's feeder cattle market for a second
straight session.
    August         closed 1.075 cents per pound lower at 146.325
cents.

 (Reporting by Theopolis Waters
Editing by Tom Brown)
  
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