LIVESTOCK-CME cattle futures edge up as slaughter rates slow

By Heather Schlitz

Feb 10 (Reuters) - Chicago Mercantile Exchange live cattle and feeder cattle futures ended up on Monday after falling hard last week, as traders largely shrugged off concerns over potential retaliatory tariffs against U.S. goods, analysts said.

U.S. President Donald Trump said on Sunday he would impose a 25% tariff increase on all steel and aluminum imports into the United States, on top of existing duties, and announce reciprocal tariffs later in the week, moves that could increase the risk of a multi-front trade war.

Trump's announcement pressured Chicago grain futures by raising concerns over potential retaliation against U.S. agricultural exports.

But most-active CME April live cattle futures LCJ25 ended up 1.35 cents to 198.125 cents per pound on Monday, while March feeder cattle FCH25 settled up 3.225 cents to 268.125 cents per pound. Both contracts recovered after hitting four-week lows on Thursday, in a setback from recent record highs in front-month contracts after a selloff by commodity funds the previous week.

U.S. beef processors were losing an estimated $210.90 per head of cattle they slaughtered, according to HedgersEdge, as cattle prices remained high and supply low.

Meatpackers slaughtered 100,000 cattle on Monday, compared to 115,000 head of cattle last week, the U.S. Department of Agriculture estimated.

"Packers are in a serious loss situation and they're trying to slow the kill," Rich Nelson, chief strategist at Allendale, said.

Lowering the slaughter rate can help push up wholesale boxed beef prices, which would be welcomed by meatpackers, analysts said.

Strong demand for beef has continued to prop up cattle futures as consumers remain willing to pay up for beef, analysts said.

The USDA two weekends ago also said it would resume cattle imports from Mexico that the agency had blocked since late November over a pest found south of the border, which has added pressure to cattle futures.

In CME's hog market, April futures LHJ25 edged 0.525 cents lower to 91.625 cents per pound and touched the highest price since December 3.

Hog futures lost steam after a small rally the previous week that was driven by relief over a lack of retaliatory tariffs on U.S. meat products from China, the world's biggest pork consumer.