February 7, 2018 / 9:31 PM / a month ago

LIVESTOCK-Funds, supply worries extend CME hog futures losses

    CHICAGO, Feb 7 (Reuters) - Chicago Mercantile Exchange lean
hogs        on Wednesday finished lower for a second straight
day following another round of fund liquidation, along with
increased supply expectations,  traders said.
    February, which will expire on Feb. 14, was pressured by
lower market-ready, or cash, hog prices as packers try to
stabilize their slipping margins.                
    February hogs         closed 0.900 cent per pound lower at
73.850 cents. Most-active April         finished 2.200 cents
lower at 69.225 cents, and below the 200-day moving average of
71.329 cents.
    "Once you crush the April (futures) like you did a couple of
days ago, and it fell below the moving averages, April just fell
apart," said Rosenthal Collins broker James Burns.
    In a few weeks, packer competition for supplies will subside
as more hogs come to market, he said.
    Pork demand is crucial for grilling items, such as loins,
with spring coming early to the south and southwestern regions
of the country, analysts and traders said.          
    They said Easter ham buying will soon pick up and more pork
bellies will be stored for spring and summer use.
    On Wednesday the U.S. Department of Agriculture's (USDA)
monthly export data showed total U.S. pork exports in December
at 514.3 million pounds, down 3.9 percent from November, but up
3.8 percent from a year ago.
    Sell stops and technical selling weighed CME live cattle
futures, said traders.
    They said Wednesday's firmer wholesale beef values and this
week's cash price expectations limited February futures
    February         live cattle closed down 0.025 cent per
pound to 125.600 cents. April         ended 0.600 cent lower at
123.975 cents.
    Some futures traders believe packers may pay roughly $126
per cwt for supplies after a few animals at Wednesday's Fed
Cattle Exchange sold at that price.
    So far processors in the U.S. Plains had bid $124 per cwt
for cattle versus up to $130 asking prices. Last week cattle in
the Plains brought $125 to $126.
    Improved beef packer margins and higher wholesale beef
values bode well for cash prices, a trader said, but added that
futures price direction will be key.
    USDA's export data showed December U.S. beef exports totaled
260.8 million pounds, up modestly from November and up 2.4
percent from a year earlier.      
    Sell stops and softer live cattle futures weakened CME
feeder cattle contracts.
    March         feeders ended down 0.425 cent per pound to
148.300 cents. 

 (Reporting by Theopolis Waters; Editing by Susan Thomas)
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