April 7, 2017 / 7:58 PM / 9 months ago

LIVESTOCK-CME live cattle futures extend gains as funds buy

    By Theopolis Waters
    CHICAGO, April 7 (Reuters) - Chicago Mercantile Exchange
live cattle        rose for a third straight day on Friday with
support from fund buying and futures' discounts to
late-afternoon cash price expectations, said traders.
    They said some market participants sold April futures and
simultaneously bought deferred months in a trading strategy
known as bear spreading.
    April live cattle         closed 1.250 cents per pound
higher at 120.050 cents, and above where the 10- and 20-day
moving averages converged at 119.667 cents. June         ended
1.675 cents higher at 111.800 cents, and above the 10-day moving
average of 110.800 cents.
    Fundamental market traders are reluctant to sell futures
because of their discounts to cash prices, which recently
declined but not sharply, said Oak Investment Group President
Joe Ocrant.
    Investors expect unprofitable packer margins, seasonally
slow wholesale beef demand and more than 30,000 cattle more for
sale than last week to undercut cash returns.
    Scheduled maintenance idled two processors on Friday,
limiting their need for supplies.
    Packer bids for slaughter-ready, or cash, cattle in the U.S.
Plains ranged from $122 to $124 per cwt versus up to $130 asking
prices, said feedlot sources. Most cash cattle last week brought
$128 to $130.
    Friday morning's average wholesale beef price slipped 25
cents per cwt to $207.65 from Thursday. Select cuts dropped
$1.24 to $199.04, the U.S. Department of Agriculture said.
    Technical buying and live cattle futures gains boosted CME
feeder cattle.
    April feeder cattle         closed 1.800 cents per pound 
higher at 133.750 cents.
    CME lean hogs        hit a three-month low as abundant
seasonal supplies continued to pressure cash prices, said
    They said bargain hunting and bear spreading limited
deferred-month losses.
    April hogs         ended 0.600 cent per pound lower at
63.325 cents, and May         down 0.550 cent to 69.000 cents.
    Friday morning's U.S. Midwest cash hog prices were steady to
$1 per cwt lower, according to regional hog merchants.
    The USDA estimated this week's hog slaughter at 2.306
million head, 147,000 more than a year ago.
    Despite abundant hogs, packers may curtail this Saturday's
kill in anticipation of tepid wholesale pork demand until after
Lent, Midwest hog merchants said.
    They attributed heavier pigs this week to warmer spring
weather that is conducive for weight gains.
    "I don't think farmers are holding back hogs as much as pigs
 are getting bigger because we're getting into nicer weather,"
an Indiana hog dealer said.

 (Reporting by Theopolis Waters; Editing by James Dalgleish)
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