October 26, 2017 / 9:35 PM / a year ago

LIVESTOCK-CME live cattle hits three-month high on cash price outlook

    * Feeder cattle closes higher
    * More lean hog market gains

    By Theopolis Waters
    CHICAGO, Oct 26 (Reuters) - Chicago Mercantile Exchange live
cattle futures        reached their highest level in nearly
three months on Thursday, fueled by short-covering and renewed
optimism for this week's cash prices, said traders.
    October         live cattle, which will expire on Oct. 31,
finished 1.125 cents per pound higher at 114.150 cents. Most
actively traded December         closed 1.625 cents higher at
120.700 cents.
    This week packers bid $111 per cwt for slaughter-ready, or
cash, cattle in the U.S. Plains versus $116 asking prices.
Cattle last week brought $110 to $111 per cwt.
    Fewer cattle for sale than last week, phenomenal packer
margins and decent domestic and foreign U.S. beef demand bode
well for cash prices by Friday, said analysts and traders.
    On Thursday, the U.S. Department of Agriculture's export
sales report for the week ended Oct. 19 showed U.S. beef exports
at 16,900 tonnes, up 25 percent from the previous week.   
    Increased slaughters and lighter animals weights in parts of
the Plains suggest cattle feeders are moving cattle to market
ahead schedule, said JRS Consulting owners Jack Salzsieder. 
    He added that increased supplies now should help mitigate
the "wall of cattle" expected later this quarter based on the
U.S. Department of Agriculture's recent monthly cattle report.
    Strong live cattle futures pulled up CME feeder cattle.
    October        , which expired at noon CDT (1700 GMT)
settled up 0.575 cent per pound higher at 155.425 cents. It
finished nearly inline with CME's feeder cattle index for Oct.
25 at 154.40 cents.
     November        , the new lead month, closed up 1.000 cent
to 157.175 cents.
    CME lean hogs        gained for a third straight session,
mainly led by short-covering and Thursday morning's higher
wholesale pork prices, said traders.
    They said some market participants sold December and at the
same time bought deferred months, lifting them to new highs, in
anticipation of tighter hog supplies during that period. 
    Thursday morning's softer cash prices capped December
future's advances.
    Packers charged grocers more for pork and paid less for hogs
to help stabilize steadily declining but still profitable
margins, a trader said.                 
    Thursday's USDA export sales report put U.S. pork exports at
18,100 tonnes, up 58 percent from the prior week.
    December         hogs ended up 0.575 cent per pound to 
65.050 cents, and February         closed 0.925 cent higher at
70.525 cents, and reached a fresh contract high of 70.725 cents.

 (Reporting by Theopolis Waters; Editing by Diane Craft)
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