LIVESTOCK-U.S. live cattle futures sag as cash disappoints

Fri Nov 1, 2013 3:57pm EDT

* CME feeder cattle mixed in quiet session
    * Hog futures fall on fund sales, anxiety on cash prices

    By Theopolis Waters
    CHICAGO, Nov 1 (Reuters) - Chicago Mercantile Exchange live
cattle finished lower on Friday, weakened by initial cash prices
that fell short of  expectations, traders and analysts said.
    A light number of cash cattle in Texas and Kansas moved at
$132 per hundredweight (cwt), which was mainly steady with last
week's record-high price, feedlot sources said. They said
sellers elsewhere in the Midwest priced cattle at $134 and
higher.
    Before Friday, improving packer margins and strong wholesale
beef prices had underpinned cash prices. Sufficient near-term
cattle numbers and talk that beef prices might peak soon
mitigated cash advances on Friday.
    "You see some hesitation in cattle when you get beef prices
where they are," said independent livestock futures trader Dan
Norcini.
    The struggling economy and some federal cuts to food stamps
on Friday will hurt consumer spending for various goods,
including certain beef and pork cuts, he said.
    Friday morning's wholesale choice beef price was $204.33 per
cwt, down 84 cents from Thursday based on a light sales volume
of 46 loads. Select cuts were at $189.58, off 50 cents,
according to the U.S. Department of Agriculture.
    U.S. beef packer margins on Friday were estimated at a
negative $16.70 per head, compared with a negative $22.35 on
Thursday, and a negative $41.35 a week ago, according to
HedgersEdge.com.   
    Fund selling developed after December and February live
cattle futures dropped below their respective 20-day moving
averages of 132.68 cents and 134.26 cents. Losses in both
contracts tripped sell stops.
    And funds that trade CME live cattle and hogs sold December
futures and bought deferred months. They moved long positions
further out before similar moves expected to be made next week
by followers of the Goldman Sachs Commodity Index (S&PGSCI).
    Funds that follow the S&PGSCI will shift their December long
positions mainly into February and April. That shifting will be
for five days starting Nov. 7.
    Live cattle December finished 0.650 cent lower at
132.075 cents, and February closed at 133.475 cents,
down 0.725 cent.
   CME feeder cattle drew pressure from technical selling and
lower live cattle futures.
   November closed 0.875 cent per lb lower at 163.500
cents, and January ended at 163.475 cents, down 0.200
cent.
   
    HOGS DROP AS FUNDS SELL
    CME hogs settled lower for a fourth straight day, led by
fund liquidation and uneasiness about cash hog prices in the
near term, analysts and traders said.
    December and February hog futures drifted below their 20-day
and 10-day moving averages of 88.52 cents and 91.99 cents,
respectively. Declines ignited selling by funds and sell stops.
    Futures this week underwent a key downward technical
reversal, EBOTTrading.com senior analyst John Kleist said. That
drew attention to tepid wholesale pork demand, hog numbers
picking up slightly and increased tonnage due to higher hog
weights, he said. 
    While cash hog prices came in mixed on Friday, they were
down in five of the past seven sessions.
    And demand for pork items, other than hams, could come under
pressure as retailers prepare to feature turkey and ham during
the Thanksgiving holiday.
    Friday morning's wholesale pork price was at $93.61 per cwt,
down 44 cents from Thursday, according to the USDA.
    December hogs ended 0.825 cents lower at 88.350
cents, and February closed 0.800 cent lower at 91.225
cents.

 (Editing by Peter Galloway)
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.