July 26, 2018 / 1:11 AM / 5 months ago

LIVESTOCK-CME hogs climb as U.S.-Mexico trade nerves ease

    CHICAGO, July 25 (Reuters) - Chicago Mercantile Exchange hog
futures closed higher on Wednesday after bargain buyers stepped
in as concerns about U.S. trade with Mexico subsided, traders
said.
    On Tuesday an adviser in the new Mexican administration said
a revamped North American Free Trade Agreement between the
United States, Mexico and Canada ought to be concluded in the
next few months.             
    Mexico continues to bring in U.S. pork via an import quota
despite retaliatory measures taken after Washington slapped
tariffs on Mexican steel and aluminum.             
    Hog futures were further supported by their price discount
to CME's hog index for July 23 at 76.17 cents, traders said.
    Investors were mindful of packers paying less for hogs amid
record-large supplies and packing plant disruptions, analysts
and traders said.
    USDA estimated Wednesday's total U.S. hog slaughter at
381,000 head, down 80,000 from the same period a week ago.
            
    JBS'          Marshalltown, Iowa, pork processing plant
approaching normal slaughter capacity after being damaged by a
tornado late last week.
    Smithfood Foods           has idled some of its plants to
upgrade equipment.
    August         hogs ended up 0.850 cent per pound at 66.400
cents. October         closed 1.400 cents higher at 53.925
cents.
 
    FIRM LIVE CATTLE SETTLEMENT  
    CME live cattle finished higher as investors adjusted
positions in anticipation of prices for market-ready, or cash,
cattle later this week, traders said.
    However, many investors are unsure how this week's cash
trade will play out given soft wholesale beef values versus
impressive packer margins.                         
    Tom Tippens, an analyst with West Oak Commodities, expects a
roughly $113 per cwt cash trade, which would be in line with
last week's sales. He cited respectable beef demand for summer
grilling and "huge" packer margins.
    "I'm one that's parked on the sidelines because we've
(futures) got ourselves a pinch overbought on the technical
side," Tippens said. 
    So far packers in Kansas and Texas had bid $110 per cwt for
cash cattle that are priced at $115 to $116. No sales were
reported at Wednesday's Fed Cattle Exchange auction.
     August         live cattle closed 0.975 cent per pound
higher at 109.025 cents. October         ended up 0.450 cent at
110.775 cents.
     CME feeder cattle finished mostly weaker. Firmer live
cattle futures underpinned August feeder cattle. 
     Higher corn prices, which tend to raise feedlot input
costs, weighed on other contracts.
     August         closed up 0.075 cent per pound at 152.825
cents. September         ended down 0.275 cent at 153.250 cents,
and October         closed down 0.100 cent at 154.450 cents.

 (Reporting by Theopolis Waters
Editing by Leslie Adler)
  
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