June 8, 2018 / 7:18 PM / 9 months ago

LIVESTOCK-Surging cash prices, easing trade fears boosts CME hogs

    CHICAGO, June 8 (Reuters) - Chicago Mercantile Exchange hog
futures closed higher on Friday fueled by rising prices for
market-ready, or cash, hogs and less concern about U.S. pork
trade with Mexico, said traders.
    On Thursday the Mexican government said it would allow some
U.S. pork into the country duty free under an import quota
despite retaliatory measures taken this week after Washington
hit Mexico with higher steel and aluminum tariffs.             
    "We (U.S.) move a lot of hams to Mexico, so this might offer
some short-term relief," a trader said.
    Short-covering, improved wholesale pork demand and fund
buying furthered CME hog market advances.
    Packers scrambled for hogs amid a seasonal supply squeeze
due to hot weather in parts of the U.S. Midwest that slowed
animal weight gains, which typically delay delivery to packers,
the trader said.        
    Wholesale pork values rose on Friday as grocers and
restaurants gear up to feature product for Father's Day on June
17, he added.         
    June         hogs, which will expire on June 14, closed 
1.475 cents per pound higher at 79.875 cents. Most
actively-traded July         ended 1.275 cents higher at 80.725
cents, and above the 200-day moving average of 80.247 cents.
    CME live cattle posted steep gains, ignited by Friday's
higher wholesale beef prices and cash cattle price optimism,
said traders.
    Live cattle futures drew additional support from
short-covering and technical buying, they said.
    "Packers appear to be short bought...and they probably have
pretty good advance beef orders to fill," said Brock Associates
Inc analyst Doug Houghton. 
    Feedlots are unwilling to sell cattle for less money this
week given historically high packer profits, said traders and
    Packers want to buy market-ready, or cash, cattle in the
U.S. Plains at around $110 to $112 per cwt, but feedlots are
digging in at $114 to $115. Last week, cash cattle in the Plains
traded at mostly $110.    
    June         live cattle closed up 1.650 cents per pound at
110.025 cents, and above the 100-day moving average of 109.477
cents. August         ended 1.625 cents higher at 105.775 cents.
    Technical buying and live cattle futures gains drove up CME
feeder cattle contracts.
   August         closed up 1.500 cents per pound at 147.575

 (Reporting by Theopolis Waters; editing by Diane Craft)
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