March 20, 2017 / 7:52 PM / 5 months ago

LIVESTOCK-Deferred cattle hit contract highs on spreading, fund buying

    By Michael Hirtzer
    CHICAGO, March 20 (Reuters) - Chicago Mercantile Exchange
cattle futures were mostly higher on Monday, with deferred
months for both live         and feeder         cattle hitting
contract highs on spreading and investment fund buying, traders
and analysts said.
    Lean hog futures         were largely lower, extending
losses to the fourth straight session in a technical selloff.
    Most-active CME April live cattle        settled 0.425 cent
lower at 118.900 cents per pound, while all other months gained
and the October 2017        through April 2018        contracts
hit life-of-contract highs.
    Investors were buying the deferred contracts on expectations
for further gains, said Altin Kalo, analyst at Steiner
Consulting Group. "You look at the back months and they start to
look a little bit cheap," Kalo said.
    CME April feeder cattle        gained 0.825 cent to 132.450
cents per pound, after climbing to 133.700 cents, the highest
since August. Feeder cattle contracts from August 2017       
through January 2018        hit lifetime highs.
    Gains in beef prices have buoyed the cattle market in recent
weeks. The U.S. Department of Agriculture earlier said
choice-grade wholesale beef eased 33 cents to $223.10 per cwt,
still near the highest levels in about nine months.             
 
    Investors this week also were taking positions ahead of
USDA's monthly Cattle on Feed report due on Friday. Preliminary
estimates indicated the number of cattle on feed in February
could be slightly lower than the 1.710 million head placed in
the same month last year, suggesting slightly smaller numbers
coming out of feedlots later this year.
    Traders were awaiting direction in U.S. Plains cash cattle
markets. Deals last week of $128 per cwt were up $3. Feedlots
were offering about 9,000 more cattle for sale this week, said
Allendale Inc analyst Peter Adams, who added that he was bearish
on cattle prices.
    Adams and others said the Brazilian meat company corruption
scandal has had little effect on U.S. meat or livestock prices.
China suspended imports of Brazilian meat after police accused
Brazilian companies of paying off inspectors to hide unsanitary
conditions. China does not buy much beef from the United States.
            
    CME April lean hog futures        were down 0.400 cent to
68.650 cents per pound, a one-week low.
    Cash hogs at midday in the top market of Iowa and southern
Minnesota were 2 cents lower at $66.05 per cwt, according to
USDA.         

 (Reporting by Michael Hirtzer; Editing by James Dalgleish)
  

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