January 22, 2018 / 10:03 PM / a year ago

LIVESTOCK-Weather, cash prices rally CME live cattle futures

    By Theopolis Waters
    CHICAGO, Jan 22 (Reuters) - Chicago Mercantile Exchange live
cattle futures turned higher on Monday, spurred by last Friday's
strong cash prices and the start this week of another round of
wintry weather in parts of the northern U.S. Plains, traders
    February         live cattle finished 1.650 cents per pound
at 123.550 cents. April         ended up 1.250 cents at 123.975
    Drifting snow in feedlots make it difficult to sort cattle
and load them onto trucks that face treacherous travel on their
way to packing plants.          
    Cattle typically do not gain weight as quickly in cold
weather as they consume feed to generate body heat - which
limits livestock supplies to packers when they need them.
    "It’s all about the weather. Usually when we get a snowstorm
we worry about the transportation, setting back the rate of
gains and it all adds up to a push higher (in futures)," said
U.S. Commodities president Don Roose.
    Packers late last week paid roughly $123 per cwt for
market-ready, or cash, cattle in the U.S. Plains that a week
earlier brought mostly $120.
    Whether packers will bid up for cattle this week remains to
be seen after soft wholesale beef demand and last week's higher
cash returns shaved their margins, analysts and traders said.
    Live cattle futures gains lifted most CME feeder cattle
contracts, except January that slipped ahead of its expiration
on Thursday.
    January         feeder cattle closed down 0.050 cent per
pound at 147.900 cents. Most actively-traded March         ended
up 0.225 cent at 145.825 cents, and April         finished 0.400
cent higher at 146.475 cents.
    Technical selling and slumping cash prices prior to Monday
afternoon pressured CME lean hogs for a second straight session,
traders said.
    Processors in the Western Corn Belt struggled to get
supplies as blizzard-like conditions in the region backed up
hogs on farms, a trader said.          
    Those animals will eventually have to come to market,
resulting in a short-term supply glut later, he said.
    Grocers bought pork to avoid potential shortages following
recent weather-related disruptions at packing plants, traders
and analysts said.         
    They added that some processors purchased hams for Easter
holiday demand while others put fresh pork bellies into freezers
for later use.
    February         hogs settled down 0.275 cent per pound at
71.800 cents. April         ended 0.375 cent lower at 75.125
cents and below the 20-day moving average of 75.401 cents.

 (Reporting by Theopolis Waters; Editing by Susan Thomas)
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