February 1, 2018 / 10:39 PM / a year ago

LIVESTOCK-Fund buying boosts CME live cattle to three-month high

    CHICAGO, Feb 1 (Reuters) - Chicago Mercantile Exchange live
cattle futures        on Thursday touched a three-month top,
spurred by short-covering and fund buying, said traders.
    April closed up its 3.000-cent-per-pound daily price limit. 
Investors bought that contract and simultaneously sold February.
The limit will expand to 4.500 cents on Friday.
    February         live cattle closed 2.575 cents per pound
higher at 126.425 cents. April         settled 3.000 cents
higher at 125.925 cents, and above the 10-day moving average of
124.190 cents.
    Some traders attributed the futures gains to Wednesday's
mildly bullish U.S. Department of Agriculture semi-annual Cattle
Inventory report that showed slower herd expansion.             
    Others argued that the Wednesday report confirmed last
Friday's USDA monthly cattle survey's implication for increased
front-end cattle supplies, and fewer animals later, as drought
shrivels winter grazing pastures.             
    "We're slowing down expansion, but there are bigger numbers
coming," said Oklahoma State University economist Derrell Peel
following Wednesday's report.
    With this week's cash cattle sales nearly completed,
investors await next week's trade against the backdrop of
plunging temperatures in the U.S. Plains. Frigid weather tends
to slow cattle gains, making them less available to packers when
    Packers this week paid $125 to $126 per cwt for
slaughter-ready, or cash, cattle versus mostly $127 last week.  
    On Thursday, USDA's export sales data showed U.S. beef for
the week ended Jan. 25 totaled 25,200 tonnes in the current
marketing year versus 28,100 tonnes in the previous week. 
    CME feeder cattle ended higher led by stronger live cattle
futures and tighter feeder cattle supply outlook. March settled
up its 4.500-cent price limit, which will be expanded to 6.750
cents on Friday.
    March         feeders ended up 4.500 cents per pound at
149.550 cents. 

    CME hogs closed higher with support from live cattle
future's advances and pork packer competition for supplies, said
    Snow and single-digit temperatures in the upper Western Corn
Belt over the next few days will make hogs harder to come by, a
trader said. 
    Farmers will keep swine buildings closed to hold in heat,
and nobody wants to lose pigs on icy roads, he said.
    USDA's export sales report put U.S. pork exports for the
latest week at 27,300 tonnes, down from 35,000 in the prior
    February lean hog futures        closed 1.600 cent per pound
higher at 74.825 cents, and hit a new contract high of 74.950
cents. Most-active April        finished up 0.525 cent at 72.825

 (Reporting by Theopolis Waters; Editing by Leslie Adler)
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