November 2, 2017 / 9:58 PM / a year ago

LIVESTOCK-CME live cattle futures retreat from 5-month high

    * Feeder cattle ends down sharply
    * Nearby hog months close weaker

    By Theopolis Waters
    CHICAGO, Nov 2 (Reuters) - Chicago Mercantile Exchange live
cattle        on Thursday settled lower, pressured by
profit-taking after futures posted new highs for the contract
and reached their highest level in almost five months, said
    December futures led decliners after funds "rolled" that
month and at the same time purchased deferred contracts ahead of
similar moves next week.
    Tuesday is the first of five days when funds in CME's
livestock markets that follow the Standard & Poor's Goldman
Sachs Commodity Index           sell, or "roll," December long
positions mainly into February and April contracts.
    December         live cattle finished 2.275 cents per pound
lower at 124.325 cents, and February         ended 1.300 cents
lower at 128.750 cents.
    "The futures seem to be sensing that we have gone up too far
too fast, thus getting ahead of the real, or cash, market," said
Oak Investment Group President Joe Ocrant. 
    On Thursday packers bid $120 per cwt for market-ready, or
cash, cattle in the U.S. Plains against sellers asking $126.
Last week, cash cattle in the Plains brought $116 to $119.
    Market bulls cited impressive packer margins and improved
wholesale beef demand after Pork Month ended in October as
supportive cash price factors.                  
    Bearish investors believe packers may resist paying more
than they have to for supplies given more cattle for sale than
last week and a significant number of readily available animals
contracted against the futures market.
    On Thursday, the U.S. Department of Agriculture's export
sales report for the week ended Oct. 26 showed U.S. beef exports
at 16,600 tonnes, mostly to South Korea. It was down 2 percent
from the week before.
    Profit-taking and live cattle futures selloff undercut CME
feeder cattle.
    November         feeder cattle closed down 1.775 cents per
pound at 157.925 cents.
    CME nearby lean hog contracts sagged, led by softer cash
prices and rolling by funds into back months, said traders.
    December         hogs ended 0.800 cent per pound lower at  
65.800 cents, and February         closed down 0.100 cent at
72.050 cents.
    Packers paid less for hogs while charging retailers more for
pork to increase their margins, traders and analysts said.
    Year-end holiday ham business and end-users putting pork
bellies into storage to accommodate spring and summer bacon
demand will influence wholesale pork values moving forward. 
    Thursday's USDA export sales report put U.S. pork exports at
25,800 tonnes, mostly to Mexico, and up 42 percent from the
prior week. 

 (Reporting by Theopolis Waters; Editing by Jonathan Oatis)
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