June 27, 2017 / 8:27 PM / 25 days ago

LIVESTOCK-CME live cattle futures erase Monday's rally

3 Min Read

    * Feeder cattle ends sharply lower
    * Lean hog contracts finish weaker

    By Theopolis Waters
    CHICAGO, June 27 (Reuters) - Chicago Mercantile Exchange
live cattle futures on Tuesday bowed to fund liquidation that
wiped out Monday's sharp gains, including the August contract's
settlement up its 3.000-cent per pound daily price limit,
traders said.
    They attributed further selling on lower wholesale beef
values that could weigh on this week's cash prices.             
    June        , which will expire on Friday, closed 1.875
cents per pound lower at 119.600 cents. Most actively traded 
August         finished 3.250 cents lower at 115.025 cents, and
below its 10-day moving average of 116.375 cents.
    CME live cattle on Wednesday will resume its normal
3.000-cent limit after failing to settle at the expanded
4.500-cent limit on Tuesday.
    Last week, market-ready, or cash, cattle in the U.S. Plains
moved at $118 to $123 per cwt.
    Investors await Wednesday morning's Fed Cattle Exchange sale
of 2,554 animals. A week ago there, a small number of cattle at
the exchange brought $123 per cwt.
    Bearish investors expect packers to pay less for
market-ready, or cash, cattle than last week given seasonally
sluggish wholesale beef demand. 
    Packers will also need fewer cattle as plants prepare to
close during the U.S. Independence Day holiday.
    Market bulls believe extremely profitable packer margins,
and fewer cattle for sale than last week, might underpin some
cash prices.
    CME feeder cattle contracts reversed Monday's 4.500-cent
limit-up close pressured by technical selling, steady-to-lower
cash feeder cattle prices and heavy live cattle futures losses.
    Feeder cattle's limit on Monday will return to 4.500-cent
price limit after not settling at Tuesday's expanded limit of 
6.750 cents.
    August feeders         ended 4.575 cents per pound lower at
144.875 cents.

    HOGS FINISH WEAKER  
    Spillover live cattle market pressure and caution before the
U.S. Department of Agriculture's quarterly hog report on
Thursday pressured CME lean hog futures, said traders.
            
    They said futures discounts to the exchange's hog index for
June 23 at 90.62 cents mitigated market losses.
    July         ended down 0.550 cent per pound to 86.475
cents, and August         down 0.125 cent to 78.550 cents.
    Processors paid slightly less for hogs before holiday plant
closures, while retailers bought pork for holiday grilling
advertisements, said traders and analysts.             
             

 (Reporting by Theopolis Waters; Editing by Leslie Adler)
  

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