LIVESTOCK-CME live cattle hit new high with cash, beef prices

Fri Jul 25, 2014 6:37pm EDT

* Feeder cattle gain with live cattle

* USDA cattle report called mildly bullish

* Mixed CME hog futures settlement

By Theopolis Waters

CHICAGO, July 25 (Reuters) - Chicago Mercantile Exchange live cattle futures hit an all-time high on Friday, fueled by record returns for slaughter-ready or cash cattle and beef at wholesale, traders said.

This week, cash cattle in Texas and Kansas mostly sold at a record high of $162 per hundredweight, up $7 from last week, feed lot sources said. Cash cattle in Nebraska fetched mainly $164, $8 to $9 higher than a week ago, they said.

Friday afternoon's wholesale price for choice beef rose $1.82 per cwt from Thursday to a record $257.38. Select beef rose $1.49 to a new top of $254.33, the U.S. Department of Agriculture said.

"Packers still needed cattle for next week and competition for supplies was once again intense," said David Hales, author of the Hales Cattle Letter.

Processors raised the price for beef they charge to grocers to counteract higher cattle costs, said traders and analysts.

Futures garnered more support from their discounts to this week's cash cattle prices.

Friday's U.S. Department of Agriculture monthly Cattle-On-Feed report was viewed as mildly bullish for CME live cattle futures on Monday.

The report showed a 6 percent drop in the number of cattle placed in U.S. feed lots last month as healthy grazing land allowed animals to be fattened outside of feedyards longer

On Friday, August live cattle closed up 2.550 cents per lb at 159.100 cents, and October 1.750 cents to 159.800.

CME feeder cattle closed higher, supported by strong live cattle contracts. Traders also cited the jump in the exchange's feeder cattle index to 214.13 for July 24 from 212.98 for July 23.

August closed up 0.925 cent per lb to 218.250 cents and September 1.200 cents at 219.250.

MIXED HOGS CLOSE

CME hogs ended mixed after a choppy session, with August supported by short-covering and its price discount to the exchange's hog index at 131.19 cents, traders said.

Lower-trending prices for market-ready or cash hogs, as packers sort through ample supplies of heavy hogs, dragged down the October futures contract.

Friday afternoon's average price of cash hogs in Iowa/Minnesota eastern Midwest, sagged 72 cents per cwt from Thursday to $123.68, according to USDA.

The CME is considering changes to its lean hog contract to lessen market volatility and should make a decision later this year, it said in a statement.

August finished up 0.425 cent per lb at 123.625 cents and October down 0.625 cent to 107.275. (Reporting by Theopolis Waters. Editing by Andre Grenon)

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