LIVESTOCK-U.S. live cattle futures turn up as Wall St. rallies

Wed Sep 18, 2013 6:17pm EDT

Related Topics

* Feeder cattle follow live cattle higher
    * USDA monthly cattle report set for Friday
    * Fund buying, short-covering lift CME hogs

    By Theopolis Waters
    CHICAGO, Sept 18 (Reuters) - Chicago Mercantile Exchange
live cattle futures turned moderately higher on Wednesday as the
Federal Reserve's decision not to curtail its bond-buying
stimulus program sent the U.S. stock market up sharply, traders
said.
    Some live cattle futures investors said renewed confidence
in the stock market bodes well for demand for U.S. goods,
including high-end cuts of meat. 
    Firm wholesale beef prices helped CME live cattle recover
from early-session losses.
    U.S. Department of Agriculture data on Wednesday afternoon
showed the wholesale choice beef price, or cutout, at $193.29
per hundredweight (cwt), up 28 cents from Tuesday. Select cuts
rose 75 cents to $176.51.  
    "We need to see the cutout and cash cattle prices stabilize
to confirm that both markets have put in a bottom heading into
the fall," a trader said. 
    Cash cattle bids in Texas and Kansas were at $121 per cwt
with sellers seeking $125 for their animals, feedlot sources
said. Last week, cash cattle in Texas and Kansas traded at $123
per cwt, and in Nebraska at $123.50.      
    Wednesday's futures and beef price advances may underpin
cash cattle prices.
    More cattle for sale in parts of the U.S. Plains and
unprofitable packer margins could weigh on cash.
    Estimated margins for U.S. beef packers on Wednesday were a
negative $3.20 per head, compared with a negative $2.00 on
Tuesday and a positive $2.35 a week ago.
    Investors adjusted positions ahead of the USDA's monthly
cattle-on-feed report to be released on Friday at 2 p.m. CDT
(1900 GMT).
    Analysts expected the upcoming report to show the number of
cattle moved into U.S. feedlots last month declined to its
lowest level in 17 years. 
    Buying of December and February futures could emerge in the
days before the report on expectations that it will show a
significant decline in placements, said Vetterkind Cattle 
brokerage president Troy Vetterkind.
    CME October live cattle closed up 0.100 cent per lb
to 125.275 cents. December ended 0.300 cent higher at
128.950 cents.
    Feeder cattle futures at the CME drew support from the firm
live cattle market and late-day technical buying.
    September ended 0.550 cents per lb higher at 157.150
cents while October settled at 158.300 cents, up 0.425
cent.

    HOGS BOUNCE BACK    
    CME hogs snapped back from session lows with support from
fund buying and short-covering, analysts and traders said.
    "Funds kept buying. That blew out the weak shorts,"
independent hog futures trader James Burns said.
    Futures made headway despite mixed cash hog prices.
    The average cash hog price Wednesday afternoon in the
most-watched Iowa/Minnesota market fell $2.16 per cwt to $94.25,
but rose 96 cents in the eastern Midwest region, according to
USDA.
    While some packers paid up for supplies to accommodate this
week's production, others focused on recouping lost margins by
lowering cash hog bids.
    HedgersEdge.com estimated margins for U.S. pork packers on
Wednesday at a negative $0.40 per head, compared with a negative
 $2.80 on Tuesday and a positive $3.20 a week ago.
    October hog futures were at a discount to CME's hog index 
at 95.33 cents, which encouraged buyers. 
    CME October hogs finished at 91.725 cents per lb,
0.750 cent higher, and December ended at 87.950 cents,
up 0.425 cent.
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