July 11, 2017 / 6:54 PM / a year ago

LIVESTOCK-Fund buying rallies CME live, feeder cattle futures

    By Theopolis Waters
    CHICAGO, July 11 (Reuters) - Chicago Mercantile Exchange
live cattle contracts on Tuesday reversed Monday's losses,
supported by short-covering and technical buying, said traders.
    Funds that follow the Standard & Poor's Goldman Sachs
Commodity Index           periodically sold, or "rolled", August
futures and simultaneously bought October on the second of five
days of the Goldman Roll process.
    August         ended 1.050 cents per pound higher at 114.875
cents. October         closed 1.400 cents higher at 114.825
cents, and above the 20-day moving average of 114.013 cents.
    Algorithm-type traders were behind Tuesday's market gains in
the absence of fundamental news, said Archer Financial Services
broker Dennis Smith.
    Fundamental investors are tracking seasonally slumping
wholesale beef values and adequate cattle supplies that market
bears believe could weigh on some cash prices later this week.
    Contrarians contend that fewer cattle for sale than last
week in parts of the U.S. Plains and still impressive packer
profits might help underpin cash returns.        
    A week ago most of the slaughter-ready, or cash, cattle in
the U.S. Plains traded from $118 to $119 per cwt.
    Market participants await Wednesday's Fed Cattle Exchange
sale of 2,655 animals. Cattle there last week, on average,
brought $117.75 per cwt.
    Fund buying and live cattle futures turnaround boosted CME
feeder cattle contracts.
    August feeders         ended 2.575 cents per pound higher at
147.250 cents.
    Short-covering and CME lean hogs' discounts to the
exchange's hog index for July 7 at 92.46 cents supported nearby
futures contracts, said traders.
    July        , which will expire on July 17, ended up 0.675
cent per pound to 92.150 cents. Most actively-traded August
        finished up 0.250 cent to 82.250 cents.
    Investors sold deferred months and bought nearby contracts
given the prospect of increased supplies during the second half
of the year. 
    Cash hog prices and wholesale pork demand may peak around
mid-July as more hogs come to market and high-heat scales back
outdoor cook outs, said traders and analysts.

 (Reporting by Theopolis Waters; editing by Diane Craft)
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