U.S. livestock: CME live cattle retreat from seven-week high

Chicago | Reuters — Chicago Mercantile Exchange live cattle Friday closed lower on technical selling and caution before cash prices by day’s end — but not before futures initially hit a seven-week high, said traders.

Investors tweaked positions on the last session of 2017 for CME live cattle that gained 3.4 per cent for the year.

December live cattle, which expired at noon CT, closed 1.55 cents/lb. lower at 123 cents (all figures US$). Most actively traded February ended 0.7 cent lower at 121.55 cents.

This week packers in the U.S. Plains bid mostly $118-$119/cwt for slaughter-ready, or cash, cattle against $125-$126 asking prices. Last week cash cattle brought $119-$120.

Tight cattle supplies, improved beef packer profits and Friday’s firmer wholesale beef values are supportive cash price factors, said traders and analysts.

Frigid temperatures across the Plains may slow down cattle weight gains, making them less available to packers.

The industry has done a good job of aggressively moving cattle to market earlier than planned because of forecasts for increased supplies ahead, based on U.S. government reports, said KIS Futures vice-president Lane Broadbent.

“If we continue to do that (pull cattle ahead), our future looks bright,” he said.

He said consumers will add high-end meat cuts to their shopping lists as long as the U.S. economy remains sound.

On Friday, the U.S. Department of Agriculture’s export sales report showed U.S. beef exports for the week ended Dec. 21 at 9,100 tonnes in the current marketing year and 12,700 tonnes for 2018.

Year-end positioning and technical buying lifted CME feeder cattle that finished the year up 12.2 percent.

January closed up 0.4 cent/lb., to 146 cents.

Hogs close mostly weaker

Profit-taking and positioning as 2017 winds down dropped most CME hog futures from contract highs during the session, said traders.

February futures benefited from firmer wholesale pork values and possibly higher cash prices next week as packers prepare for post-New Year’s production, said traders.

Hog futures were up 8.2 per cent for 2017.

February closed up 0.225 cent/lb. to 71.775 cents. April ended down 0.05 cent to 75.65 cents, and spiked to a contract high of 76.325 cents. May finished down 0.075 cent, to 80 cents, and hit a high of 80.75 cents.

USDA’s export sales report put U.S. pork exports in the current marketing year at 16,600 tonnes, and 20,800 for the coming year.

— Theopolis Waters reports on livestock markets for Reuters from Chicago.

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