May 4, 2018 / 7:47 PM / in a year

LIVESTOCK-CME live cattle sag as funds roll positions

    CHICAGO, May 4 (Reuters) - Chicago Mercantile Exchange live
cattle futures on Friday drew pressure from funds that sold, or
"rolled," June positions into back months before similar moves
lasting five days beginning on Monday, said traders.
    Continued uneasiness about burdensome supplies ahead further
deterred futures buyers, they said.
    There may be some concern about a "tsunami of cattle," said
CHS Hedging analyst Steve Wagner. But reduced cattle weights
suggest feedlots are marketing cattle earlier than planned,
which could mitigate larger supplies possibly around June or
July, he said. 
     June         live cattle closed 0.475 cent per pound lower
at 106.050. August         ended down 0.450 cent at 105.075
     This week packers paid $123 to $128 per cwt for
market-ready, or cash, cattle that a week ago brought $118 to
$126.50 last week.
     Much-improved wholesale beef demand and historically high
packer profits were incentives for processors to compete for
cattle, said traders and analysts.                  
     Investors look ahead to next week's cash cattle trade
against the backdrop of tight near-term supplies and ramped up
retail meat purchases in preparation for Memorial Day holiday
grilling demand.
     On Friday, the U.S. Department of Agriculture's (USDA)
monthly meat export data showed March U.S. beef exports totaled
260.6 million pounds, up 15.4 percent from February and up 11.4
percent from a year ago. 
     Weaker CME live cattle futures undercut the exchange's 
feeder cattle contract.
     May         closed 0.400 cents per pound lower at 140.400 
    CME lean hog futures finished flat to mixed, with support
from firmer cash and wholesale pork prices, said traders.
    But future's premiums to the exchange's hog index for May 2
at 62.93 cents, and pork demand uncertainty through the rest of
this year, pressured some contracts, they said.
    May         closed unchanged at 67.075 cents per pound. Most
actively traded June         ended up 0.025 cent at 73.525
cents, and July         closed down 0.100 cent at 75.575.
    Some packers raised bids for hogs for next week's
production, while others competed less for supplies to preserve
their margins, said analysts and traders.                
    Grocers may be buying pork and chicken as price-competitive
options to beef.         
    "Wholesale beef prices continue to move higher making pork
the better alternative," said Wagner.
    Friday's USDA export data put March's pork total at 538.1
million pounds, up 9.6 percent from the prior month and up 2.7
percent from a year earlier. 

 (Reporting by Theopolis Waters
Editing by Marguerita Choy)
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