November 7, 2017 / 10:00 PM / in a year

LIVESTOCK-Cash price unease weakens CME live cattle futures

    By Theopolis Waters
    CHICAGO, Nov 7 (Reuters) - Chicago Mercantile Exchange live
cattle on Tuesday settled lower, pressured by sell stops and
caution in advance of cash prices later this week, traders said.
    Funds involved in CME livestock futures that track the
Standard & Poor's Goldman Sachs Commodity Index           sold,
or "rolled," December long positions mainly into February and
April contracts. Tuesday was the first of five days for the roll
    December         live cattle finished 0.700 cent per pound
lower at 124.625 cents, and February         ended down 0.275
cent to 130.375 cents.
    Schwieterman Inc. broker Domenic Varricchio listed several
potential headwinds for slaughter-ready, or cash, cattle prices
including the recent run up in gasoline prices.
    "Crude oil going up like it has, you have to watch gasoline
if it starts coming up because maybe it begins eating into the
beef budget a little bit," said Varricchio.
    Packers may also think twice about paying more for supplies
after sharply higher cash in recent weeks shaved their margins.
And turkey and ham, rather than beef, will grace most grocery
store advertisements heading into the Thanksgiving holiday.
    Still, market bulls believe this week's cash prices will
draw support from spotty supply shortages and recently improved
beef demand following National Pork Month in October.           
    Investors will look to Wednesday's Fed Cattle Exchange (FCE)
of almost 1,200 animals as a barometer for subsequent cash
prices elsewhere in U.S. Plains. One pen of cattle there a week
ago brought $120 per cwt.
    Last week the bulk of cash cattle in the Plains moved from
$122 to $126 per cwt.
    Softer nearby live cattle futures weighed on CME feeder
    November         feeder cattle closed down 0.275 cent per
pound at 159.875 cents.
    Sell stops, downward-trending cash prices and fund
liquidation dragged CME lean hogs lower, said traders.
    December         hogs ended 0.700 cent per pound lower at  
63.925 cents, and below the 20-day moving average of 64.290
cents. February         closed 1.350 cents lower at 70.875
cents, and below the 10-day moving average of 71.370 cents.
    Fallen cash prices suggest packers are nearly full
inventory-wise as a few farmers send hogs to market after
wrapping up harvest activities in the Midwest, a trader said.
    He added that some producers might be moving hogs to market
ahead of schedule to avoid lower prices that typically occurs
before plants close during the Thanksgiving holiday.

 (Reporting by Theopolis Waters; Editing by David Gregorio)
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