June 20, 2018 / 9:02 PM / 5 months ago

LIVESTOCK-Cattle futures hit 3-month high on technicals; hogs extend drop

    By Michael Hirtzer
    CHICAGO, June 20 (Reuters) - U.S. live cattle futures
        climbed to a three-month peak on Tuesday, buoyed by
technical buying and spreading as some investors bought cattle
and sold hog futures, traders said.
    Most-active Chicago Mercantile Exchange August live cattle
       settled up 0.225 cent to 106.650 cents per pound,
climbing for the fourth straight session and finishing above its
100-day moving average for the first time since March.
    Futures were further supported by their discount to the cash
cattle market, with nearly 1,500 cattle trading at an average
price of $110 per cwt - the equivalent of a futures price of
110.000 cents per pound - at the weekly Fed Cattle Exchange
online auction.    
    Some traders were squaring up positions ahead of a monthly
U.S. Department of Agriculture Cattle on Feed report due on
Friday that analysts predicted would show smaller amounts of
cattle moved into feedlots in May, which could limit supplies
available to beef packers later this year.             
    Separate USDA data on Friday was expected to show about
451.8 million pounds of beef and 623.2 million pounds of pork in
U.S. cold storage in May, according to a few analysts. Both of
the figures, if realized, would be lower than meat in storage in
April.             
    "These guys are buying ahead of the Cattle on Feed report,"
independent livestock trader Dan Norcini said of the gains in
cattle futures.
    CME August feeder cattle        edged 0.200 cent lower to
149.425 cents per pound, declining after earlier hitting a
three-month high of 150.750 cents.
    Lean hog futures         dropped over 2 percent for the
second straight session, easing in sympathy with sagging cash
hog prices. Most-active August hogs        briefly fell by their
3.000-cent daily price limit before finishing 2.575 cents lower
at 75.150 cents per pound, a 1-1/2 week low.
    Pork packers whose profit margins were in negative territory
for the first time since 2015 have scaled back slaughter rates
in recent days, cutting demand for hogs and weighing on prices.
            
    Hogs in the top cash market of Iowa and southern Minnesota
were down 84 cents to $82.51 per cwt, USDA said.         
    

 (Additional reporting by Theopolis Waters in Chicago; editing
by Diane Craft)
  
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