CME Live Cattle Sag as Funds Roll Positions; Hogs Mixed

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Chicago Mercantile Exchange live cattle futures on Friday drew pressure from funds that sold, or "rolled," June positions into back months before similar moves lasting five days beginning on Monday, said traders.

Continued uneasiness about burdensome supplies ahead further deterred futures buyers, they said.

There may be some concern about a "tsunami of cattle," said CHS Hedging analyst Steve Wagner. But reduced cattle weights suggest feedlots are marketing cattle earlier than planned, which could mitigate larger supplies possibly around June or July, he said.

June live cattle closed 0.475 cent per pound lower at 106.050. August ended down 0.450 cent at 105.075 cents.

This week packers paid $123 to $128 per cwt for market-ready, or cash, cattle that a week ago brought $118 to $126.50 last week.

Much-improved wholesale beef demand and historically high packer profits were incentives for processors to compete for cattle, said traders and analysts.

Investors look ahead to next week's cash cattle trade against the backdrop of tight near-term supplies and ramped up retail meat purchases in preparation for Memorial Day holiday grilling demand.

On Friday, the U.S. Department of Agriculture's (USDA) monthly meat export data showed March U.S. beef exports totaled 260.6 million pounds, up 15.4 percent from February and up 11.4 percent from a year ago.

Weaker CME live cattle futures undercut the exchange's feeder cattle contract.

May closed 0.400 cents per pound lower at 140.400 cents. 

Hogs Close Steady-Mixed

CME lean hog futures finished flat to mixed, with support from firmer cash and wholesale pork prices, said traders.

But future's premiums to the exchange's hog index for May 2 at 62.93 cents, and pork demand uncertainty through the rest of this year, pressured some contracts, they said.

May closed unchanged at 67.075 cents per pound. Most actively traded June ended up 0.025 cent at 73.525 cents, and July closed down 0.100 cent at 75.575.

Some packers raised bids for hogs for next week's production, while others competed less for supplies to preserve their margins, said analysts and traders.

Grocers may be buying pork and chicken as price-competitive options to beef.

"Wholesale beef prices continue to move higher making pork the better alternative," said Wagner.

Friday's USDA export data put March's pork total at 538.1 million pounds, up 9.6 percent from the prior month and up 2.7 percent from a year earlier.