LIVESTOCK-Cattle knocked lower by stocks, storm
CHICAGO, Oct 29 (Reuters) - Cattle futures closed lower on Friday, with the October contract down the 3-cent-per-lb daily limit at its midday expiration, in reaction to a sharply lower stock market and forecasts for more deliveries against the futures.
Hogs futures closed mostly higher, although the spot December was pushed lower by spreading and the lower stock market.
In cattle, bearish traders ruled the day. There were 36 more deliveries against the October and traders predicted that nearly all of those will be retendered, which would mean weak demand for cattle.
In all, there have been 1,066 deliveries against October, and all of them have been from the northern Plains, where there has been an abundance of heavy cattle.
Cash cattle traded higher this week at $87 to $88 per cwt, but Chicago traders said a Rocky Mountain snowstorm had beef plants rushing to buy cattle before the snow fell. In the storm's aftermath, they predicted there will be less demand for cattle and next week's cash sales will be at $85 to $86.
Also bearish for cattle futures was the 200-point drop in Friday's U.S. stock market. That tumble renewed worries the economy continues to struggle and may deter consumers from buying beef when lower-cost foods are available.
"Stocks are down more than they gained yesterday. Yesterday's rally didn't give any help to the beef bulls," said Peter Adams, a principal with Chicago-based PNM Trading. "It is still a jobless recovery so it's not going to help beef."
The October cattle 2LCV9 expired on Friday down the 3-cent limit, down 3.54 percent, at 81.650 cents per lb and the actively traded December fell 0.600 cent, or 0.7 percent, to 85.675 cents.
Feeder cattle futures posted minor gains due to double-digit losses in the corn market.
Corn is an important feed and when the price goes down, demand for feeder cattle often increases. Forecasts for better harvest weather had nearby corn futures drop about 13 cents per bushel at the Chicago Board of Trade on Friday.
November feeder cattle 2FCX9 closed up 0.200 at 94.800 cents per lb and 2FCF0 up 0.050 at 95.075.
CME hog futures finished mostly higher on Friday and were higher for the week following news that China may soon resume imports of U.S. pork and to talk that Russia may have bought U.S. hams.
China is not expected to be a big buyer of U.S. pork, because it has plenty of its own, analysts said. However, the prospects for another export market for pork was enough to send hog futures higher this week.
The December hogs 2LHZ9 set at a three-month high on Thursday, and Friday's close, although down from Thursday's, was the second-highest close in that time. February 2LHG0 futures closed at a three-month high on Friday.
December hogs were pressured much of the day by the lower stock market and by February/December and April/December spreading. The spreading appeared to be traders moving longs to the deferred months. Continued...
