May 24, 2018 / 9:57 PM / 10 months ago

LIVESTOCK-Cattle ease on positioning ahead of USDA supply report

    By Michael Hirtzer
    CHICAGO, May 24 (Reuters) - Chicago Mercantile Exchange live
cattle futures         fell nearly 1 percent on Thursday,
pressured by fears of lower trades in cash cattle markets and
positioning ahead of a government supply report due on Friday,
traders said.
    The U.S. Department of Agriculture was set to release its
monthly Cattle on Feed report during Friday's session, one of
only a handful of the reports that will come out during the
trading day this year. 
    Analysts polled by Reuters expected USDA to show that
placements of cattle into feedlots in April dropped by about 9
percent from the same month in 2017.             
    Traders were squaring up their positions ahead of the
report, which could trigger volatile swings in prices. 
    CME June live cattle        was down 1.050 cents to 104.400
cents per pound and August cattle        1.025 cents lower to
101.775 cents. August feeder cattle        fell 0.050 cent to
143.300 cents per pound, after earlier hitting a two-week high
of 144.800 cents.
    Beef packers have not bid aggressively for cattle this week,
suggesting that they had relatively ample supplies for their
slaughter needs. Some feedlots in Texas and Kansas were offering
to sell cattle at about $115 to $116 per cwt, in prices that
would be about even with cattle sales last week.         
    "No one has a good grasp on what cash (cattle) is going to
do this week," one futures trader said. "It doesn't seem like
packers really need cattle. I would be surprised they do
anything before the (USDA) report."
    Next week will see reduced cattle and hog slaughters as most
meat plants shut down for Monday's U.S. Memorial Day holiday -
closures that can result in a backlog in available animals.
    "The bottom line is that it's extremely likely the cash
steer market will be lower this week," said Archer Financial
Services broker Dennis Smith.
    However, the three-day holiday weekend is also the
unofficial start of summer grilling season, typically resulting
in increased demand for beef steaks and chops, hot dogs and
other cuts. Beef packers, in particular, have taken advantage of
comparative low cattle prices and meat prices to lock in big
    Lean hog futures         were higher as they extended their
recovery from recent multiweek lows. CME June hogs        were
up 0.225 cent to 74.825 cents per pound and most-active July
hogs        up 0.550 cent to 76.775 cents.

 (Reporting by Michael Hirtzer, editing by G Crosse)
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