April 13, 2017 / 7:32 PM / 3 months ago

LIVESTOCK-Cattle futures firm on discount to cash trades, hogs rebound

3 Min Read

    By Michael Hirtzer
    CHICAGO, April 13 (Reuters) - Chicago Mercantile Exchange
live cattle futures climbed to a roughly 1-1/2 year high on
Thursday, boosted by gains in cash cattle prices that widened
futures' discount to the cash market, dealers said.
    Feedlots bought a small number of cattle in Nebraska at $128
per cwt, up $2 from last week. CME April live cattle futures
       were trading at an equivalent of about $125 per cwt and
June cattle at about $115 per cwt.
    "We discounted the futures market last fall and since then,
futures have been continuously behind the spot (cash) market,"
said Steiner Consulting Group analyst Altin Kalo. 
    Some traders expected weaker trades in U.S. cash cattle
markets this week and the higher values prompted gains in
futures. "We started on a weak foot and rocketed back higher,"
Kalo added.
    Investors were exiting shorts or liquidating longs in April
live cattle        before it expires at the end of the month.
The contact finished 1.175 cents higher at 125.375 cents per
pound, highest since Nov. 12, 2015.
    Most-active June live cattle        gained 0.350 cent to
114.700 cents per pound, off the earlier life-of-contract high
115.525 cents. CME May feeder cattle        were 0.575 cent
higher at 138.400 cents per pound.
    CME lean hog futures fell to the lowest levels since
December before turning higher. Most-active June lean hogs
       settled 0.225 higher at 72.500 cents per pound.
    Hogs had drifted lower for weeks, weighed down by higher
U.S. hog production that pressured hog prices in cash markets.
    Kalo said some investors likely were bargain hunting on
expectations that U.S. meat prices will begin to rise amid
demand for outdoor grilling, potentially triggering more
aggressive buying of hogs by pork packers.
    "(Traders are) testing to see where the bottom (in hog
futures) is going to be before they get bullish for the summer
market," he said.
    CME livestock futures trading will be closed on Friday for
the Good Friday holiday.

 (Reporting by Michael Hirtzer; Editing by Chizu Nomiyama)
  

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