October 12, 2017 / 9:09 PM / a year ago

LIVESTOCK-CME live cattle futures slump; cash prices disappoint

    * Feeder cattle down sharply
    * Hog contracts finish lower

    By Theopolis Waters
    CHICAGO, Oct 12 (Reuters) - Chicago Mercantile Exchange live
cattle        on Thursday reversed some of their recent gains,
pressured by profit-taking following this week's initial cash
prices that fell short of expectations, said traders.
    To avoid cattle deliveries, some investors sold the October
contract either outright or simultaneously bought deferred
months in a trading strategy known as bear spreading.
    October         live cattle finished 1.425 cents per pound
lower at 112.350 cents, and December         closed 1.250 cents
lower at 117.275 cents.
    On Thursday morning a small number of slaughter-ready, or
cash, cattle in the southern U.S. Plains brought $111 per cwt,
said feedlot sources. That was up as much as $2 from last week,
but $1 less than what some traders had anticipated.
    Cash bids for remaining cattle were at $108 to $110 per cwt
against sellers holding out for $113, said feedlot sources.
    Packers created market uncertainty by initially bidding $108
per cwt early on Thursday, suggesting they had ample
inventories, only to turn around and pay $111 later in the day,
said Top Third Ag Marketing broker Jeff French.
    He also attributed Thursday's futures losses to the
technically overbought market and uneasiness about U.S. beef
exports if ongoing NAFTA talks prove unsuccessful.
    "As a nation, we sell 14 percent of the beef we produce on
the world market. We're talking big numbers," said French.
    Thursday's wholesale beef values snapped back from
Wednesday's setback, an indication of erratic demand as
retailers feature pork during October National Pork Month.
    Profit-taking, firmer corn prices and live cattle futures'
selloff dragged down CME feeder cattle contracts. 
   October         ended 0.600 cent per pound lower at 153.550
    CME lean hogs drew pressure from fund liquidation and
selling in the exchange's neighboring live cattle market, said
    Profit-taking and hog futures' premiums to CME's hog index
for Oct. 10 at 58.32 cents contributed to the market's bearish
tone despite supportive cash and wholesale pork prices, they
    October         hogs, which will expire on Friday, ended
0.550 cent per pound lower at 60.700 cents. Most actively traded
December         finished 0.875 cent lower at 61.625 cents, and
below the 200-day moving average of 61.782 cents.
    Record daily hog slaughters at higher prices suggest new
packing plants are competing for hogs, a trader said. But
grocers may soon curtail Pork Month advertisements while
considering promoting beef in early November, he added.

 (Reporting by Theopolis Waters; Editing by James Dalgleish)
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