CME close: hogs up again, cattle mixed

CHICAGO, Aug 5 (Reuters) – Chicago Mercantile Exchange hogs
on Monday rose for a fourth straight session, with buying
encouraged by the discount of futures to cash hog prices,
traders and analysts said.

CME’s hog index at 100.66 cents was at a premium to the spot
August contract, which encouraged buyers. August will expire on
Aug. 14.

“The index led people to think August futures will expire at
over 100.00 cents just like the previous spot contracts did in
recent months,” a trader said.

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Spot August closed at 100.225 cents per lb, 0.975
cent higher.

Spread traders bought most-actively traded October futures and sold August. The spread lifted October beyond key moving

average resistance levels, which triggered buy stops and fund
buying.

Most-actively traded October ended at 85.500 cents,
up 1.550 cents. That contract finished above the 40-day moving
average of 84.95 cents.

After cutting cash hog bids before Monday’s floater
holiday, processors late Monday hiked cash bids to ensure
themselves of supplies for the rest of this week’s production.

Packers also plan to increase Saturday’s slaughter to make
up for Monday’s downtime.

U.S. Department of Agriculture data showed the average hog
price Monday afternoon in the most-watched Iowa/Minnesota

market at $99.78 per hundredweight (cwt), $2.50 higher than on

Friday.

Back-to-back Monday floater holidays reduced the flow of
fresh pork to end-users which pushed up the cutout.

Monday afternoon’s USDA mandatory wholesale pork price
report, or cutout, was $104.56 per cwt, up 54 cents from Friday.
Ribs for grilling lead all price categories.

SIDEWAYS CATTLE TRADE ON SPREADS

CME live cattle settled narrowly mixed as worries about
likely deliveries stirred bearish spreads, traders and analysts
said.

Monday is the first notice day for deliveries against the
August contract that will expire on Aug. 30.

The spread between futures and cash has narrowed
significantly in recent weeks which could limit the number of
deliveries, a trader said.

Slipping wholesale beef prices, which may weigh on cash

prices this week, pressured August futures.

USDA on Monday afternoon quoted the wholesale price of
choice beef at $186.46 per cwt, 75 cents lower than Friday.
Select cuts dropped 36 cents to $180.54.

Last week, cash cattle in Texas moved at $119 per cwt and
mostly $119 in Kansas, with a few at $120, said feedlot sources.
Cash prices were generally steady with the week before, they
said.

The bulk of live-basis cattle last week in Nebraska sold at
$120.50 per cwt, roughly steady with the previous week, a
feedlot source said.

Expectations for a seasonal uptrend in cash cattle and beef
prices encouraged modest deferred-month futures buying.

August live cattle closed down 0.100 cent to 120.550
cents per lb and October at 124.550 cents, or up 0.075
cent.

Firm deferred-month live cattle futures and weak corn prices

underpinned CME feeder cattle.

Traders also cited $1 to $3 per cwt higher prices for feeder
cattle at the closely-watched Oklahoma City market.

August feeders closed at 153.975 cents, up 0.250
cent per lb, and September unchanged at 157.000 cents.

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