LIVESTOCK-Feeder cattle drop, traders await news on US imports from Mexico

By Tom Polansek

CHICAGO, April 17 (Reuters) - Feeder cattle futures fell on the Chicago Mercantile Exchange on Friday as traders predicted the U.S. Department of Agriculture would announce plans to resume imports of livestock from Mexico.

Some contracts temporarily sank by the exchange-imposed limit before USDA Secretary Brooke Rollins spoke at an event in Texas, the nation's biggest cattle-producing state.

Rollins made no announcement about restarting U.S. imports of Mexican cattle, which USDA has mostly halted for more than a year to keep out the New World screwworm pest spreading in Mexico.

"New World screwworm is only about 200 miles from this border so there will not be a port opening in Texas until that significantly pushes back," Rollins said at a Moore Air Base in Edinburg, Texas.

USDA is building a facility at the base to produce sterile flies intended to eradicate the pest.

The halt of cattle imports from Mexico has contributed to historically tight supplies in the U.S. and record prices. Domestic inventories also dwindled as drought burned up grazing lands in the western U.S., forcing ranchers to send more cattle to be slaughtered.

Rollins said that next Friday she would visit a port in Douglas, Arizona, where Mexican cattle formerly entered the U.S. USDA said last year that the Douglas port presented the lowest risk for resuming cattle imports.

"I feel very confident in what they've built there and what they've prepared for," Rollins said.

CME May feeder cattle futures FCK26 ended down 1.825 cents at 365.275 cents per pound and traded as low as 357.850 cents per pound. Futures extended a setback after reaching a contract high of 377.575 cents per pound on Tuesday.

Live cattle futures also dropped, with the June contract LCM26 ending down 0.275 cent at 247.350 cents per pound.

"Feeders were leading the way," said Austin Schroeder, commodity analyst for Brugler Marketing & Management.

After trading ended, USDA said there were about 11.6 million cattle in feedlots as of April 1, down 0.5% from a year earlier. That matched analysts' expectations.

In CME's lean hog market, June futures LHM26 fell for the ninth straight session. The contract closed down 0.625 cent at 101.050 cents per pound and set the lowest price since December.