December 18, 2017 / 10:09 PM / 2 months ago

LIVESTOCK-Supply, demand worries pull CME hogs from 4-month high

    By Theopolis Waters
    CHICAGO, Dec 18 (Reuters) - Chicago Mercantile Exchange lean
hog futures        eased from a four-month top on Monday,
pressured by uneasiness over burdensome supplies and tepid meat
demand, said traders.
     Technical selling and futures' premiums to CME's hog index
for Dec. 14 at 64.11 cents further weighed on the market, they
said.
    February         hogs ended 1.125 cents per pound lower at
67.400 cents, and April         finished 0.550 cent lower at
72.250 cents.
    Both contracts closed below their respective 10-day moving
averages of 68.088 and 72.468 cents.
    "We are attempting to see how the market handles these huge
slaughter numbers as far as the demand side goes for the pork,"
said independent livestock futures trader Dan Norcini.
    Packers paid less for plentiful hogs as plants look ahead to
shutting down at least one day over the Christmas and New Year's
holidays, said analysts and traders.                   
    They said retailers are purchasing small amounts of pork
after nearly wrapping up year-end holiday business - especially 
hams.         
    Volatility in futures is anticipated as investors adjust
positions before the upcoming holiday and the U.S. Department of
Agriculture's (USDA) quarterly hog report on Friday at 11 a.m.
CST, traders and analysts said.
    On Friday USDA will simultaneously release its monthly
Cattle-On-Feed and cold storage reports.
    
    MOSTLY WEAKER CATTLE FUTURES
    The bulk of CME's live cattle contracts landed in modestly
bearish territory in anticipation of increased supplies, said
traders.
    Monday's higher wholesale beef values and last Friday's
better-than-expected cash cattle prices hoisted December futures
 above their 40-day moving average of 119.766 cents.
    "Last week's cash may be the high for the next several
weeks," David Hales, president of Hales Trading Co,  wrote in
his newsletter to clients.
    December         live cattle finished 1.075 cents per pound
higher at 119.975 cents. February         ended 0.425 cent lower
at 120.600 cents, and April         closed down 0.125 cent at
122.025 cents.
    Retailers on Monday may have bought beef to make sure they
have enough inventory after packing plants close during the
year-end holidays, a trader said.           
    Last week packers paid $118 to $120 per cwt for
slaughter-ready, or cash, cattle that a week earlier fetched
$115 to $118.
    This week's cash price expectations vary given fewer animals
for sale and packers not needing as many cattle because of
holiday plant closures.
    CME feeder cattle mimicked back-month live cattle market
weakness.
    January         feeder cattle closed down 0.100 cent per
pound at 147.650 cents.

 (Reporting by Theopolis Waters; Editing by Matthew Lewis)
  
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