December 5, 2017 / 9:39 PM / 10 months ago

LIVESTOCK-CME feeder cattle futures 3-month low on fund selloff

    By Theopolis Waters
    CHICAGO, Dec 5 (Reuters) - Chicago Mercantile Exchange
feeder cattle futures        on Tuesday hit a three-month low,
led by fund liquidation after contracts slipped beneath chart
support levels, said traders.
    CME live cattle market selling, and as much as $5 per cwt
lower cash feeder cattle prices, pressured the market, they
    January         feeder cattle closed 2.125 cents per pound
lower at 147.825 cents, and below the 100-day moving average of
148.888 cents.

    Sell stops and expectations for weaker cash prices pressured
CME live cattle futures, except December that was partly
supported by higher wholesale beef values, said traders.
    December         live cattle finished up 0.050 cent per
pound at 116.425 cents. February         ended 0.650 cent lower
at 120.525 cents, and April         finished 0.875 cent higher
at 121.525 cents.
    Investors await Wednesday's Fed Cattle Exchange sale of 653
animals to set the tone for this week's overall cash trade. 
    Last week slaughter-ready, or cash, cattle in the U.S.
Plains brought $119 to $121 per cwt.
    Packers may grow their margins and reduce their need for
supplies by cutting slaughter rates, said traders and analysts.
    Roughly 25,000 more cattle for sale than last week and the
seasonal pullback in beef demand ahead further threatens
near-term cash prices, they said.           
    "The packer is coming into this week with 125 percent larger
purchased inventory than last week, which we suspect will tend
to limit the price competition between packers for this week’s
buy," said Hales Cattle Letter author David Hales. 
    CME lean hogs gave back some of Monday's gains, led by
profit-taking and uncertainty about hog supplies moving forward,
said traders.
    The December contract, which will expire on Dec. 14, was
guided by the exchange's hog index for Dec. 1 at 63.92 cents.
    December         hogs ended 0.675 cent per pound lower at
64.275 cents. February         closed 1.175 cents lower at
70.500 cents.
    On Tuesday a few processors raised bids for hogs to round
out this week's slaughter schedule while keeping pace with their
impressive margins, a trader said.        
    But a Midwest packing plant that was offline last week for
equipment installation backed animals up on farms in the region,
which could pressure cash prices, said analysts.
    They added that plants that were closed over the
Thanksgiving holiday, and those planning to shutdown for
Christmas and New Year's, imply a significant backlog of hogs

 (Reporting by Theopolis Waters; Editing by David Gregorio)
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