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U.S. livestock: CME live, feeder cattle extend rally

Chicago | Reuters –– Chicago Mercantile Exchange live cattle futures on Monday ended sharply higher, with the February contract up the expanded 4.5-cent/lb. price limit, on more short-covering following Friday’s bullish government cattle report, traders said.

The U.S. Department of Agriculture’s Cattle on Feed report on Friday showed the number of cattle placed into U.S. feedlots in November fell to their lowest level since USDA started tabulating the data in 1996.

Spot December ended 3.25 cents/lb. higher at 123.4 cents, and February settled limit up at 130.025 cents (all figures US$). Live cattle’s trading limit will remain at 4.5 cents on Tuesday.

Fund buying developed after December and February opened above their 10-day moving averages of 120.57 and 125.67 cents, respectively.

December futures eased from session highs in response to the setback in wholesale beef prices that may pressure cash values later this week.

Monday morning’s wholesale choice beef price fell $1.54/cwt from Friday, to $192.60. Select cuts dropped $1.07, to $185.28, based on USDA data.

Last week, market-ready, or cash, cattle in the U.S. Plains sold at $115 to $118/cwt, steady to $4 lower than in the previous week.

Beef demand and cash prices encountered headwinds from record amounts of pork and full packer inventories with plants closed three to four days each week during the year-end holidays, traders and analysts said.

CME feeder cattle posted significant gains, with spot-January up the expanded 6.75-cent price limit, fuelled by live cattle futures’ steep climb.

January feeders finished at 155.5 cents, with the limit holding at 6.75 cents on Tuesday.

Weak hog futures close

CME lean hogs slipped in anticipation of weaker near-term cash prices, traders said.

Spot February closed 0.175 cent/lb. lower at 56.45 cents, and April down 0.05 cent to 62 cents.

Cash hogs in the Midwest on Monday morning traded mostly 50 cents/cwt lower on abundant supplies heading into the Christmas and New Year’s holiday-shortened work weeks.

Some farmers are trying to avoid lower cash prices by sending hogs to market ahead of schedule, an Ohio dealer said. “If they keep that up, we might wind up with less hogs down the road,” he added.

Packers on Monday processed 445,000 hogs, 4,000 more than last week, based on USDA estimates.

Some investors adjusted positions in advance of the government’s quarterly hog report on Wednesday.

Theopolis Waters reports on livestock markets for Reuters from Chicago.

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