January 9, 2018 / 9:22 PM / 9 months ago

LIVESTOCK-CME live cattle futures mount late-session rally

    By Theopolis Waters
    CHICAGO, Jan 9 (Reuters) - Chicago Mercantile Exchange live
cattle        closed moderately higher on Tuesday, following
late-day short-covering and bargain hunting after three sessions
of losses, said traders.
    Futures initially drew more support from their lower price
compared to last week's slaughter-ready, or cash, cattle
returns. 
    Market advances were limited by funds in CME's livestock
markets that track the Standard & Poor's Goldman Sachs Commodity
Index          . Those funds "rolled," or periodically sold
February positions and simultaneously bought deferred months.
    Tuesday was the second of five days for the roll process.
    February         live cattle finished 0.450 cent per pound
higher at 117.675 cents. April         ended up 0.225 cent at
119.525 cents.
    Packers last Friday and so far this week paid $119 to $120
per cwt for cash cattle in the U.S. Plains, down from mostly
$123 the week before.
    Feedlots sold livestock for less money on concerns that
warmer weather in the U.S. Plains this week might unleash cattle
that had backed up in feedyards during last week's arctic blast,
said analysts and traders.
    Bitter cold tends to slow down animal weight gains and
impede transportation of cattle to packing plants. Moderating
temperatures allow livestock to gain weight quicker and is
conducive for sending animals to market.
    Bullish futures traders believe improved packer profits and
strong wholesale beef prices may encourage processors to pay
more for supplies this week.                  
    Market bears said improved weather conditions, and the lack
of significant cattle sales to packers last week, might weigh on
cash prices.          
    Wednesday's Fed Cattle Exchange sale of 711 animals could
set the tone for overall cash prices in the Plains this week.
    CME feeder cattle ended mostly higher after traders sold the
January contract and simultaneously bought deferred months.
    January         feeder cattle closed down 0.975 cent per
pound to 145.475 cents. March         ended up 0.825 cent to
142.750 cents, and April         finished 0.650 cent higher at
142.675 cents.
 
    HOG FUTURES END MIXED
    CME February lean hog futures closed up modestly,
underpinned by strong cash and wholesale pork prices as packers
and grocers shore up inventories for the week, said traders.
    They said profit-taking and future's overbought technical
condition limited market advances and pressured some trading
months.
    February         hogs settled up 0.200 cent per pound at
73.175 cents, and earlier hit a new high for the contract of
73.450 cents. April         ended down 0.025 cent at 76.775
cents.

 (Reporting by Theopolis Waters; Editing by James Dalgleish)
  
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