July 2, 2018 / 9:43 PM / 3 months ago

LIVESTOCK-Feeder cattle futures jump as corn prices drop, hogs mixed

    By Michael Hirtzer
    CHICAGO, July 2 (Reuters) - U.S. feeder cattle futures
        rose to nearly four-month highs on Monday as declining
feed prices boosted demand for the variety of cattle fattened
and then sold to beef packers.
    Live cattle futures        , reflecting the animals already
fattened for slaughter, were narrowly higher while lean hogs
        were widely mixed on the Chicago Mercantile Exchange.
    CME August feeder cattle        settled up 0.600 cent at
151.925 cents per pound, the highest since March 8. Several
deferred feeder cattle contracts notched even bigger gains, with
thinly traded contracts for 2019 hitting lifetime peaks.
    CME August live cattle        were up 0.175 cent to 106.900
cents per pound, the highest closing price since March 20.
    Cattle prices climbed as prices for corn        sank to
life-of-contract lows on the Chicago Board of Trade. Corn prices
dropped in part due to good growing conditions in the U.S.
Midwest.
    When animal feed prices decline, costs are reduced for
feedlot operators, often resulting in better demand. At a
closely watched weekly feeder cattle auction in Oklahoma City,
feeder steer prices were up $5 to $8 per cwt and demand was
described as good, according to the U.S. Department of
Agriculture.             
    Both feeder and live cattle prices climbed sharply late last
week amid investment fund buying.
    Lean hog prices were mixed on Monday. Most-active August hog
futures tumbled 2.075 cents to 74.375 cents per pound even as
July futures        were up 0.325 cent to 83.200 cents.
    Some hog contracts fell due to fear that Mexico, the top
importer of U.S. pork, could bring in fewer supplies due to
tariffs imposed on some pork cuts, according to U.S. Commodities
analyst Don Roose.
    "We had a new election in Mexico and the feeling is that is
going to make it tougher to negotiate NAFTA," Roose said,
referring to the North American Free Trade Agreement. "The
(U.S.) administration is already pushing it back to November."
    In an interview with Fox News on Sunday, President Donald
Trump said he would complete a new NAFTA trade deal with Mexico
and Canada until after the November congressional elections.
            
    The winner of Mexico's presidential election, Andres Manuel
Lopez Obrador, said on Monday that he will be respectful of the
current government's NAFTA negotiators and that his transition
team will seek to join the trade talks.             

 (Additional reporting by Julie Ingwersen in Chicago; editing by
Jonathan Oatis)
  
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