September 8, 2017 / 8:20 PM / 10 months ago

LIVESTOCK-Funds, short-covering extend CME live cattle gains

    * Feeder cattle up 3rd straight day
    * Lean hog contracts settle higher

    By Theopolis Waters
    CHICAGO, Sept 8 (Reuters) - Chicago Mercantile Exchange live
cattle futures        on Friday closed higher for a third day in
a row, led by fund buying and investors who covered previously
short positions, said traders.
    December led advances after funds in CME's livestock markets
that track the Standard & Poor's Goldman Sacks Commodity Index
          bought that contract and sold, or rolled, out of
October futures.
    Friday was the first of five days for the "roll" process.
    October         live cattle finished 1.100 cents per pound
higher at 107.325 cents, and above the 20-day moving average of
106.541 cents. December         closed 1.725 cents higher at
112.850 cents, and above the 40-day moving average of 112.375
    Futures rose in the face of tepid wholesale beef demand and
uncertainty regarding this week's slaughter-ready, or cash,
cattle prices.          
    So far, packers in the U.S. Plains tabled bids of $102
and$105 per cwt for cash cattle priced above $107, said feedlot
sources. A week ago, cash cattle fetched $103 to $105.
    Some processors need cattle after not purchasing a
significant number of them last week, but supplies appear ample
and animal weights have increased, which creates more tonnage of
meat, a trader said.
    He said feedlots are reluctant to sell cattle at lower
prices knowing that packers are running plants with extremely
profitable margins.         
    On Friday, the U.S. Department of Agriculture's (USDA)
export sales report for the week ended Aug. 31 showed U.S. beef
sales at 5,900 tonnes, the lowest this year. 
    The decline was due to an adjustment in product reporting by
exporters to Egypt, an industry source said.
    More live cattle futures advances and technical buying sent 
CME feeder cattle        upward for a third consecutive session.
   September         closed 2.325 cents per pound higher at
147.875 cents.
    Fund buying, bargain hunting and short-covering pared some
of CME lean hogs' recent losses, said traders.
    October         ended up 0.700 cent per pound to 62.150
cents, and December         finished 0.625 cent higher at 58.900
    Uneasiness about cash hog prices and wholesale pork demand,
amid abundant supplies, pulled futures from morning highs.
    "There's no getting around it, there's just too many hogs,"
said Schwieterman Inc. broker Domenic Varricchio.
    USDA estimated this week's hog slaughter at 2.170 million
head, 84,000 more than a year ago.
    Friday's USDA export report showed U.S. pork sales at 25,700
tonnes, mostly for Japan, compared to 25,900 the week before.

 (Reporting by Theopolis Waters; Editing by James Dalgleish)
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