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LIVESTOCK-CME live cattle, hog futures slump on profit-taking
February 15, 2017 / 9:44 PM / 10 months ago

LIVESTOCK-CME live cattle, hog futures slump on profit-taking

    By Theopolis Waters
    CHICAGO, Feb 15 (Reuters) - Chicago Mercantile Exchange live
cattle futures on Wednesday bowed to profit-taking, prompted by
softer wholesale beef values and uncertainty about cash prices
this week, traders said.
    Technical selling contributed to market losses, they noted.
    February live cattle         closed 0.600 cent per pound
lower at 116.775 cents, and below the 10-day moving average of
116.860 cents. April         ended 0.650 cent lower at 113.350
    The choice wholesale beef price, or cutout, on Wednesday
morning declined 43 cents per cwt to $187.93 from Tuesday.
Select cuts fell 53 cents to $186.72, the U.S. Department of
Agriculture said.
    The beef cutout was surprisingly weaker, considering that
most of the pricing for beef by retailers will take place on
Wednesday, said Linn Group analyst John Ginzel.
    A small number of animals at Wednesday morning's Fed Cattle
Exchange moved at mostly $118.50 to $119.25 per cwt, with an
average price of $118.75. That included "natural" or
antibiotic-free cattle that brought $123.00. Cattle there last
week averaged $117.50.
    "Those natural cattle may have skewed the FCE cash price
average upward a bit," said Ginzel.
    A few packers short on supplies may underpin cash prices in
parts of the Plains, a trader said. But poor packer profits and
soft beef demand did not bode well for cash returns elsewhere,
he added.
    Wednesday's average beef packer margins were at a negative
$79.70 per head, down from negative $67.45 a week ago, as
calculated by
    Short-covering and cash feeder cattle price strength
supported CME feeder cattle.
    March feeders         closed up 0.275 cent per pound to
124.275 cents.
    CME hogs fell on technical selling and profit-taking despite
supportive market fundamentals, traders said.
    April         closed 0.525 cent per pound lower at 70.775
cents, and beneath the 10-day moving average of 70.858 cents.
May         ended 0.425 cent lower at 75.525 cents.
    Wednesday morning's cash hog price in the Midwest was steady
to firmer as packers capitalized on good margins and brisk pork
demand, according to regional hog merchants.
    USDA data on Wednesday morning showed the average wholesale
pork price up $1.19 per cwt to $86.57 from Tuesday, primarily
due to $5.96 higher pork bellies.
    "Pork bellies have been carrying the hog market all this
year, and that may end ugly," said Ginzel, referring to
forecasts for increased hog supplies ahead. 

 (Reporting by Theopolis Waters; Editing by Richard Chang)

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