* Feeders further supported by gains in live cattle
* Live cattle rise on higher beef quotes, short-covering
* Dec hogs up with cash, others wilt amid spreads
By Theopolis Waters
CHICAGO, Oct 15 U.S. feeder cattle futures
rallied almost 1 percent on Monday, lifted by short-covering as
corn prices fell more than 2 percent amid fund liquidation,
improving feedlot demand for younger cattle.
Feeder cattle at the Chicago Mercantile Exchange garnered
further support from gains in its live cattle market.
"When the corn market sells off, feeders (futures) have the
ability to go quite a bit higher. Because of the lower corn
market, there's still demand for feeders (cattle)," said Lane
Broadbent, vice president of KIS Futures.
Spot October feeder cattle closed 1.250 cents
higher, or 0.87 percent, at 144.350 cents per lb. Most-actively
traded November closed at 145.550 cents, up 1.325 cents
or 0.92 percent.
LIVE CATTLE TURN UP
CME live cattle turned higher, as strong wholesale beef
prices prompted short-covering, analysts and traders said.
They said some investors adjusted positions in advance of
the U.S. Department of Agriculture's cattle-on-feed report to be
issued on Friday.
Those polled by Reuters so far said fewer cattle were likely
placed in feed yards last month versus a year earlier after the
worst drought in more than 50 years sent feed costs to all-time
highs last summer.
Spot October live cattle closed up 0.250 cent per
lb, or 0.20 percent, at 124.150 cents. December ended at
125.975 cents, up 0.475 cent or 0.38 percent.
The wholesale price for choice beef on Monday morning jumped
$2.22 per cwt to $193.89 and select cuts climbed $1.79 to
$178.83, according to USDA estimates.
But uncertainty about subsequent deliveries and cash cattle
price direction limited futures' advances.
R.J. O'Brien floor manager Jim Brooks said people were
waiting to see whether the 12 deliveries reported by the
exchange on Friday would be reissued later on Monday.
Feedlots continued to count the number of cattle up for sale
this week. Cash cattle last week moved mostly at $125 per cwt.
DEC HOGS GAIN, OTHERS LAG
Aside from December hog futures that were underpinned by
higher cash hog values, other months succumbed to bearish
spreads because of lower corn prices, analysts and traders said.
The view among spreaders is that the premiums in the
deferred months may not be justified if feed costs continue to
The average price for hogs in the most-watched
Iowa-Minnesota market on Monday morning came in at $82.63 per
cwt, up 91 cents from Friday, the USDA said.
Packers raised bids for cash hogs to assure themselves of
supplies through the middle of the week, a trader said. December
futures' discount to cash became more pronounced after the
October contract expired last Friday, he said.
December closed up 0.175 cent per lb, or 0.22
percent, at 78.550 cents.
February ended down 0.075 cent, or 0.09 percent, at
84.575 cents. April settled 0.500 cent lower, or 0.55
percent, at 89.950 cents.
(Editing by Dale Hudson)