* Feeder cattle futures post new high
* Mostly lower CME hogs settlement
By Theopolis Waters
CHICAGO, July 28 Chicago Mercantile Exchange
live cattle on Monday settled mixed on spreads after
hitting a new high, fueled partly by Friday's bullish U.S.
Department of Agriculture cattle report, traders said.
Friday's report revealed a bigger-than-expected drop in the
number of cattle moved into feedlots in June after sufficient
grazing land allowed animals to be fattened outside of feedyards
Last week's record-high returns for market-ready, or cash,
cattle and Monday's strong wholesale beef quotes encouraged
Last week, cash cattle in the U.S. Plains moved at $162 to
$165 per hundredweight (cwt), up as much as $9 from the prior
Monday morning's choice wholesale beef price rose $1.39 per
cwt from Friday to a record $258.77. Select beef climbed $1.71
to a new top of $256.04, the U.S. Department of Agriculture
Scarce cattle forced packers to spend more for supplies,
prompting processors to pass that cost on to retailers.
CME live cattle eased from morning highs after some
investors claimed profits following recent market advances.
A few traders sold October futures and simultaneously bought
deferred months in a trading strategy known as bear spreading.
Bullish market participants expect packers to again run
short of supplies, and hike cash bids as long as grocers buy
beef at higher prices.
Market bears contend that by maintaining their discounts to
cash cattle prices, futures are anticipating lower cash prices
August live cattle closed down 0.050 cent per lb at
159.050 cents, and October 0.725 cent lower at 159.075.
December finished at 159.250 cents, up 0.475 cent,
and February 0.650 higher at 157.500.
CME feeder cattle marked a new high on back-month
live cattle market gains. Traders cited the exchange's feeder
cattle index jump to 221.95 cents for July 25 from 214.13 for
August closed up 1.925 cents per lb to 220.175 cents
and September 1.950 cents at 221.200.
MOSTLY LOWER HOGS CLOSE
CME hogs ended mostly lower after traders sold back months
and simultaneously bought August in a trading strategy known as
Traders were also lured to August's discount to the
exchange's hog index at 130.33 cents, despite sharply lower hog
The morning's average price of cash hogs in Iowa/Minnesota
slumped $3.54 per cwt from Friday to $121.83, according to USDA.
Year-over-year hog weight increases prevented the acute
shortage of pork and contributed to the drop in cash prices,
said Archer Financial Services broker Dennis Smith.
August finished up 0.050 cent per lb at 123.675
cents. October was down 0.650 cent to 106.625, and
December was at 97.350 cent, 0.800 lower.
(Reporting by Theopolis Waters; editing by Gunna Dickson)