* Higher cash prices, short-covering fuel buying
* Most live cattle futures firm as funds roll
* Feeders mimic mostly firm live cattle market
By Theopolis Waters
CHICAGO, March 7 Chicago Mercantile Exchange
lean hog futures on Thursday posted their biggest daily
percentage rise in three months as higher cash prices triggered
short-covering, said traders and analysts.
CME lean hogs rose 3.23 percent on Thursday, their
biggest one-day increase since Dec. 17, 2012.
Advances pushed CME April and June hogs through their
respective 10-day moving average resistance levels at 80.89
cents and 90.88 cents, attracting more buyers.
Futures were also oversold based on their Relative
Strength Index (RSI) on Wednesday at 21.18. A market with an RSI
below 30 is considered technically oversold.
"The market was oversold and may have run out of sellers.
And cash appeared to be up this morning with a few plants
needing hogs for this week," said R.J. O'Brien hog futures
trader Tom Cawthorne.
April hogs ended at 81.800 cents per lb, up 2.550
cents. June hogs climbed 2.575 cents to 92.025 cents.
The average price for hogs Thursday morning in the eastern
Midwest region was $1.92 per cwt higher from Wednesday at
But late on Thursday, hog prices in the most-watched
Iowa/Minnesota market had fallen by $2.42 to a $75.64 average.
U.S. pork packer margins on Thursday were a positive $0.55
per head versus a positive $5.05 on Wednesday and a positive
$10.50 a week ago, according to HedgerEdge.com.
Smithfield Foods, the world's largest pork processor
and hog producer, beat third quarter earnings expectations
helped by its packaged meat business.
The company's stock posted its biggest one-day increase
since early December 2010. The stock closed up 10.7 percent, or
$2.38 a share, to $24.68 on Thursday.
"I don't know if it (Smithfield) was supportive for the
market, but it didn't hurt," said Cawthorne.
MOST CATTLE UP AS FUNDS ROLL
CME live cattle closed mostly higher featuring the official
start of the Standard & Poor's Goldman Sachs Commodity Index
(S&PGSCI) roll by funds, said traders and analysts.
Funds that follow the index shifted their spot April long
positions into June and August. Thursday was the first of five
days for the (S&PGSCI) roll.
They said April futures traded nearly in line with cash
cattle in the southern U.S. Plains that moved at $128 per cwt,
steady with a week ago.
April closed at 128.300 cents per lb, down 0.500
cent. June rose 0.500 cent to 124.450 cents. August
finished at 125.250 cents, up 0.450 cents.
Investors await the sale of unsold cattle in Nebraska after
beef packer margins turned positive for the first time in six
HedgersEdge.com put beef packer margins on Thursday at a
positive $5.10 per head versus a negative $10.30 on Wednesday
and a negative $24.05 a week ago. It was last positive on Sept.
7, 2012 at $1.00.
Although wholesale beef values continued their uptrend, some
traders worry it may discourage meat buyers at higher price
levels. What may discourage?
USDA data showed wholesale choice beef on Thursday at
$196.90 per cwt, up 82 cents from Wednesday; select cuts rose 29
cents to $195.09.
CME feeder cattle followed the mostly firm live cattle
March feeders settled 0.450 cent per lb lower at
140.475 cents. April ended at 142.625 cents, up 0.375
cents. May finished 0.350 cent higher at 144.925 cents.