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LIVESTOCK-Cattle drop 3-cent price limit after bearish USDA report
September 25, 2017 / 9:27 PM / 3 months ago

LIVESTOCK-Cattle drop 3-cent price limit after bearish USDA report

    By Michael Hirtzer
    CHICAGO, Sept 25 (Reuters) - Chicago Mercantile Exchange
cattle futures tumbled about 2 percent on Monday after
government data on Friday showed bigger-than-expected placements
of cattle on feed in August.
    Most-active CME December live cattle        dropped by the
daily price limit of 3.000 cents to finish at 114.425 cents per
pound, reversing from Friday's 1-1/2 month high. Front-month
October cattle settled 2.350 cents lower at 109.225 cents.
    The U.S. Department of Agriculture following the close of
futures trading on Friday said the number of cattle that moved
into feed lots spiked 3 percent last month. Analysts had
predicted a decline in placements of nearly 3 percent.
            
    Bigger placements suggested more cattle would reach
slaughter weight by late this year and early next year.
    The USDA also showed ample supplies of U.S. beef in cold
storage, further pressuring cattle futures.             
    "It was a knee-jerk reaction," CHS Hedging Steve Wagner said
of the selling in cattle.
    December cattle quickly fell by the daily price limit when
trade resumed on Monday and remained locked limit-down until the
close. CME October feeder cattle        fell by their price
limit of 4.500 cents to finish at 151.600 cents per pound.
    Trading limits in live cattle will be expanded to 4.500
cents on Tuesday and feeder cattle limits to 6.750 cents, the
CME Group said on its website.
    Wagner said cattle futures could rebound based on strong
demand from beef packers. Packers last week in the southern U.S.
Plains paid about $108 per cwt for cattle, up from $105 to $106
in the previous week.
    CME lean hog futures         were higher, recovering from
recent losses on technical buying and unwinding of cattle-hog
spreads.
    Front-month CME October lean hogs        fell to a contract
low of 55.375 cents per pound, before finishing up 0.625 cent at
56.325 cents. Most-active CME December hogs        gained 0.800
cent to 57.425 cents.
    "It's a reversal ... the (hog) market has been oversold long
enough where we can have a nice bounce," Wagner said.
    

 (Reporting by Michael Hirtzer in Chicago; Editing by Dan
Grebler)
  

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