LIVESTOCK-CME live cattle jump on fund buying, lofty beef prices

By Karl Plume

CHICAGO, March 27 (Reuters) - Chicago Mercantile Exchange live cattle futures on Thursday climbed for a third straight session on tight market-ready supplies and rising beef prices, analysts said.

Cattle pushed higher on buying by commodity funds that hold a sizable net long position in the market, more than offsetting pressure from a drop in beef export sales.

The U.S. Department of Agriculture (USDA) reported that net U.S. beef export sales last week fell to the lowest since late December after news that China allowed registrations permitting exports from hundreds of American meat facilities to lapse.

Actively traded June live cattle LCM25 were 2.465 cents higher at 209.50 cents per pound, approaching a contract high posted last week and settling near its session peak.

"Right now, the funds are big longs in the cattle market and continue to defend their position," said Don Roose, president of U.S. Commodities in West Des Moines, Iowa.

The choice boxed beef cutout value on Thursday afternoon fell $2.58 to $335.72 per hundredweight (cwt) from a 21-month high the previous day, while the select cutout rose $2.91 to $319.44 per cwt.

Feeder cattle futures followed live cattle higher, supported by weakening corn feed prices, with the actively traded May contract FCK25 ending up 1.350 cents at 286.525 cents per pound.

CME lean hog futures drifted lower ahead of a quarterly USDA report due after the close that was expected to show the U.S. hog supply at its second-highest March 1 level on record.

April lean hogs LHJ25 touched a three-week low and settled down 0.375 cent at 96.175 cents per pound.

After the close, the USDA in its hog inventory report reported the March 1 supply just below the year-ago level, short of the average analyst forecast for a 1.2% increase.

That report also showed a slight drop in marketings and a roughly 1% decline in the breeding supply.