LIVESTOCK-US cattle futures climb higher on technical trading; USDA weighs reopening Mexico border

By P.J. Huffstutter

CHICAGO, April 1 (Reuters) - Chicago Mercantile Exchange cattle futures continued to rise on Wednesday on technical trading and expectations of strong grilling season demand, as feeder cattle futures shook off early session pressure over the potential of the U.S.-Mexican border reopening for cattle, market analysts said.

Traders were focusing on comments U.S. Secretary of Agriculture Brooke Rollins made on this issue at the Texas & Southwestern Cattle Raisers Association convention in Fort Worth - and a recording of those comments that was included in a recent Beef Buzz podcast.

According to the recording, Rollins said the agency is closely monitoring the spread of New World screwworm and is weighing a phased reopening of the southern border to Mexican feeder cattle.

One U.S.-Mexico commercial port of entry that USDA is looking at potentially reopening is in Douglas, Arizona, which is about 800 miles from the closest known screwworm case, Rollins said, according to the recording.

"We're currently evaluating a potential phased-in strategy," Rollins said.

"We obviously will not be opening all four ports any time soon. But there is a realistic conversation that is happening, that is looking at that port that is about 800 miles from the closest case," she said.

Rollins said she expects an announcement on the matter, either way, within the next two to four weeks.

In a statement to Reuters, a USDA spokesperson said the agency will resume livestock imports "at such a time when we determine the risk of NWS introduction into the U.S. can be adequately mitigated."

USDA said that it is evaluating a combination of factors, "including our science-based import protocol, the animal health status of individual Mexican states, and the degree to which Mexico's national agriculture authority has made progress in implementing our recommendations."

The potential of a port reopening sent feeder cattle futures falling early in the session, before bouncing back later in the session, said Dan Norcini, an independent livestock analyst.

"The trade realized that even when the ports reopen, it's going to be a trickle of cattle coming in, not a flood," Norcini said. "It's simply going to take time for a significant shift to happen."

Wholesale beef prices were lower. On Wednesday morning, USDA reported that choice cuts of boxed beef eased down 69 cents to $394.80 per hundredweight (cwt), while select cuts ticked down 30 cents at $392.63 per cwt.

CME June live cattle LCM26 settled 1.075 cents higher at 244.350 cents per pound. Earlier in the session, June futures hit a new life-of-contract high of 244.800 cents per pound.

Meanwhile, CME May feeders FCK26 finished higher for the fifth straight session, settling up 1.525 cents at 368.000 cents per pound.

CME lean hog futures firmed on technical trading, though prices are carrying a premium into the summer months, market analysts said. CME June lean hog futures LHM26 ended 0.125 cent higher, settling at 105.175 cents per pound.