May 17, 2018 / 9:13 PM / 3 months ago

LIVESTOCK-Live cattle rebound on technical buying, short-covering

    By Karl Plume
    CHICAGO, May 17 (Reuters) - Chicago Mercantile Exchange live
cattle futures         bounced on Thursday on technical buying
and short-covering following three days of steep declines that
had sliced prices by more than 5 percent, traders said.
    Optimism that a deal on a revamped North American Free Trade
Agreement (NAFTA) could be reached by the end of the month gave
livestock markets underlying support. But traders remained
cautious amid ongoing trade talks between the United States and
China in Washington this week.                          
    CME June live cattle        ended up 1.225 cents at 103.050
cents per pound. Actively traded CME August live cattle futures
       added 0.050 cent at 99.100 cents per pound after earlier
touching its lowest level since April 4.
    Ample cattle supplies and weakening cash cattle prices at
U.S. Plains feedlot markets have dragged down futures this week,
although nearby contracts remain at a large discount to cash
prices, which was limiting further futures declines.
    Some U.S. Plains fed cattle have already traded from $112 to
$118 per cwt this week, well below last week's sales of mostly
$122 per cwt, traders said.
    "The futures have already built in a lot of the weakness in
cash prices going forward and the (futures) market is
technically oversold," said Doug Houghton, analyst with Brock
Associates Inc.
    Although a beef price rally appeared to be reaching a top
early this week, choice wholesale beef prices edged higher on
Thursday, suggesting strong demand.
    Beef packer margins also continued to climb, reaching as
estimated $181.95 per head on Thursday, up from $139.95 a week
ago, according to livestock marketing advisory service
HedgersEdge.com.                   
    Feeder cattle futures rose along with live cattle. The
actively-traded August contract        ended 2.000 cents higher
at 138.725 cents per pound.
    Lean hog futures         advanced on firm cash markets and
good pork demand, including for export.
    The U.S. Department of Agriculture pegged net pork export
sales last week at nearly 22,000 tons, up about 12 percent from
the previous four-week average.
    CME June hogs        gained 0.575 cent to 76.475 cents per
pound while July hogs        ended 0.525 cent higher at 78.200
cents.   

 (Reporting by Karl Plume; Editing by Cynthia Osterman)
  
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