June 15, 2018 / 8:41 PM / 5 months ago

LIVESTOCK-CME live cattle pivot higher on bargain buying

    CHICAGO, June 15 (Reuters) - Chicago Mercantile Exchange
live cattle       turned up sharply on Friday, with support from
short-covering and bargain buying after Thursday's losses that
were partly led by U.S. trade uncertainty, said analysts and
traders.
    On Friday China said it planned to impose similar size
tariffs soon after Washington announced duties on $50 billion of
Chinese goods.             
    Some CME live cattle investors had feared China would slap
higher tariffs on U.S. beef after imposing an extra 25 percent
duty on U.S. pork in early April.
    Opening the Chinese market to U.S. beef in June 2017
presents an opportunity for growth, but up to this point it is
not a major importer of U.S. beef, said independent livestock
futures trader Dan Norcini.
    Instead, CME live cattle buyers focused on future's bullish
price discount to prices for market-ready, or cash, cattle.
    Packers want to buy cash cattle in the U.S. Plains for $110
per cwt amid abundant supplies. Sellers are asking for as much
as $120 while eyeing slipping, but historically high, packer
margins.
    On Thursday a few cash cattle in Nebraska brought $110 per
cwt, down $4 to $5 from last week.
    Fund buying provided more lift to live cattle contracts that
broke through technical resistance levels.
    June         live cattle closed 2.200 cents per pound higher
at 108.450 cents, and August         ended 2.900 cents higher at
104.775 cents. Both contracts landed above their respective
10-day moving averages of 107.857 cents and 104.013 cents.
    Live cattle future's rebound and technical buying rallied 
CME feeder cattle contracts.
    August         closed 4.275 cents per pound higher at
147.950 cents.

    HOG FUTURES END MOSTLY WEAKER
    CME hog investors sold deferred contracts and simultaneously
bought July stirred by soaring cash and wholesale pork prices as
supplies diminish seasonally, traders said.
    Technical selling along with caution over U.S. pork trade
with China, Mexico and Canada further weighed on August futures
and remaining 2018 trading months. 
    "Any damage as far as U.S. pork export share going into
China has already been done with those tariffs already in
place," said Norcini. 
    Trade issues regarding Canada and Mexico are worrisome
because they are larger markets for pork than China, he added.
    July         hogs ended up 0.100 cent per pound at 81.725
cents. August         closed down 0.350 cent at 78.250 cents,
and below the 100-day moving average of 78.827 cents. October
        finished 0.375 cent lower at 64.275 cents.

 (Reporting by Theopolis Waters; Editing by Richard Chang)
  
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