LIVESTOCK-Record cash prices send U.S. live cattle to 9-month high

Wed Oct 23, 2013 7:11pm EDT

* Beef price climb adds more futures support
    * CME feeder cattle end mixed after choppy trade
    * Mixed hog futures settlement on spreads

    By Theopolis Waters
    CHICAGO, Oct 23 (Reuters) - Before settling mixed, Chicago
Mercantile Exchange live cattle on Wednesday spiked to a
nine-month top in response to record-high cash prices.
    Cash cattle in Texas and Kansas fetched mostly $132 per
hundredweight (cwt), which was up $3 from last week, feedlot
sources said. That price surpassed the previous record high of
$130 for the week ending March 2, 2012. 
    "Everything that was supposed to happen fundamentally came
together for the cattle market," said U.S. Commodities analyst
Don Roose, who also cited rising wholesale beef values.
    Wednesday afternoon's average wholesale choice beef price,
or cutout, was at $200.79 per hundredweight (cwt), up $1.46 from
Tuesday, which eclipsed the June 18 price of $200.24. 
    Wednesday's strong cash cattle and beef prices reflected the
lowest U.S. cattle herd in 61 years. 
    Less cattle are available now after prolonged drought in
parts of the United States in recent years damaged crops. That
sent last summer's feed costs to all-time highs and forced
ranchers at that time to reduce their herds.
    However, CME October live cattle settled just off their
session highs on profit taking after four straight days of
advances.
    Other contracts finished in negative territory on selling
with the view that those months may be too pricey based on
Wednesday's cash sales. And traders were concerned that
consumers would switch to less-costly pork if beef prices trend
higher.
     Live cattle October closed 0.700 cent per lb higher
at 131.800 cents. It earlier hit an eight-month high of  132.150
cents. 
     December finished at 132.750 cents, down 0.225
cent.
     CME feeder cattle mimicked live cattle's mixed settlement.
     October closed at 166.150 cents per lb, up 0.100
cent, while November slipped 0.225 cent to 167.625
cents.
    
    SPREADS STIR MIXED HOGS    
    CME hogs settled mixed.
    Spread traders sold December futures and bought deferred
months amid uncertainty about near-term cash hog prices and the
big drop in wholesale pork values, traders said.
    USDA's data showed the wholesale pork price, or cutout, was
at $93.49 per cwt on Wednesday afternoon, $2.01 lower than on
Tuesday. The $5.82 fall in ham prices pressured the cutout.  
    Wednesday afternoon's average price of hogs in the closely
watched Iowa/Minnesota market was at $86.70 per cwt, up 28
cents, but down 18 cents at $86.83 in the eastern Midwest.
     More hogs are entering the market "inch by inch," said
Roose.
     And newly harvested corn and cooler weather are quickly
allowing hogs to put on weight, adding tonnage to the market, he
said.
    December hogs closed 0.425 cent per lb lower at
88.150 cents and February finished down 0.325 cent at
90.200 cents.
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