December 20, 2017 / 10:13 PM / 6 months ago

LIVESTOCK-Supply worries knock CME feeder cattle to four-month low

    By Theopolis Waters
    CHICAGO, Dec 20 (Reuters) - Chicago Mercantile Exchange's
feeder cattle sank        on Wednesday to a four-month low, hit
by a selloff in live cattle futures as well as expectations for
increased supplies, said traders.
    "You've got this cattle report coming out on Friday, and
everybody says placement numbers are going to be up," said JRS
Consulting owner Jack Salzsieder.
    Analysts, on average, expect Friday's monthly Cattle-On-Feed
report from the U.S. Department of Agriculture (USDA) to show a
5.7 percent bump in the number of cattle placed in feedlots last
month in than November 2016.             
    January         feeder cattle closed 3.425 cents per pound
lower at 141.775 cents.

    LIVE CATTLE SLUMP BEFORE REPORT 
    Fund liquidation and positioning before Friday's USDA cattle
report weighed on CME live cattle futures, traders said.
    Cash prices traded generally steady on Wednesday, limiting
losses in December futures.
    December         live cattle finished down 0.600 cent per
pound to 119.400 cents, and below the 40-day moving average of
119.850 cents. February         ended 1.500 cents lower at
118.950 cents, and below the 10-day moving average of 119.248
cents.
     A few animals at Wednesday's Fed Cattle Exchange brought
$120 per cwt, up $4 from last week's light trade there.
    Packers in the U.S. Plains paid mostly $120 per cwt for
slaughter-ready, or cash, which is consistent with mainly $120
sales last week, according to feedlot sources.
    Tight supplies in parts of the country underpinned cash
prices, but some processors avoided paying more than they had to
because of seasonally slack beef demand.           
    Overall meat demand this time of year typically takes a back
seat to Christmas celebrations and shoppers paying off year-end
holiday debt later on, analysts and traders said.

    HOG FUTURES RALLY
    Firmer cash hog and wholesale pork prices rallied CME hogs
from recent lows, said traders.
    Short-covering and technical buying gave hog futures an
added lift, they said.
    Investors awaited Friday's USDA quarterly hog report that is
expected to show further herd expansion.             
    February         hogs finished 1.475 cents per pound to
68.375 cents, and April         closed 1.275 cents higher at
72.950 cents.
    Both contracts settled above their respective 10-day moving
average of 67.673 and 72.212 cents.
    Four new plants this year forced packers to compete for hogs
when they usually pay farmers a lot less for them before plants 
close for the winter holidays, a Midwest hog dealer said.
        
    He said week-over-week lighter animal weights suggest
farmers are quickly moving pigs to market, which could result in
fewer of them later - a positive for cash prices.          

 (Reporting by Theopolis Waters, editing by G Crosse)
  
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