March 8, 2013 / 10:31 PM / 5 years ago

LIVESTOCK-US live cattle futures drop as funds sell

* Uncertainty lends to bearish market psychology
    * Feeders move lower with live cattle market
    * Hogs mixed; higher cash expectations, spreads

    By Theopolis Waters
    CHICAGO, March 8 (Reuters) - Chicago Mercantile Exchange
live cattle futures on Friday settled lower as fund liquidation
dragged contracts down 1.8 pct for the week, said traders and
    They said uncertainty about cash cattle prices next week
pressured CME live cattle futures. 
    The potential furlough of meat inspectors, which could shut
down some packing plants, kept some futures buyers on the
sidelines, a trader said. 
    And, bullish spreads at times encountered funds rolling out
of the spot April contract into distant months in accordance
with the Standard & Poor's Commodity Index (S&PGSCI). 
    Funds that follow the S&PGSCI index shifted their spot long
positions into June and August. Friday was the second of five
days for the (S&PGSCI) roll.    
    Investors also cited cash cattle that traded in the southern
Plains at $128 per cwt, which was steady with last week. But
traders had anticipated a higher cash market given strong beef
demand and improved beef packer margins. put beef packer margins at a positive $3.85
per head versus a positive $5.10 on Thursday and a negative
$23.40 a week ago.
    U.S. Department of Agriculture data showed wholesale choice
beef at $197.28 per cwt, up 38 cents from Thursday and $9.18
higher then a week ago.
    Feeder cattle futures followed the lower live cattle market
and higher corn prices that could raise input costs for
    CME feeder cattle finished 1.8 percent lower for the
    March feeders settled 1.500 cent per lb lower at
138.975 cents. April ended at 141.350 cents, down 1.275

    CME April hogs drew support from expectations for higher
cash hog and wholesale prices next week that stirred bullish
spreads, said traders and analysts.
    They said the spreads and profit taking pressured the June
    CME hogs settled up 1.1 percent for the week.
    April hogs ended at 82.025 cents per lb, up 0.225
cents. June hogs slid 0.325 cents to 91.700 cents.
    The average price for hogs on Friday morning in the eastern
Midwest region was up 36 cents per cwt from Thursday at $74.40.
But prices at the most-watched Iowa/Minnesota market late Friday
tumbled $4.33 to $71.09.
    "There's was no shortage of hogs this week judging by 
slaughters that at times pulled down cash but that may not be
the case next week," a trader said.
    Hog supplies are expected to tighten and pork demand should
pick up soon as supermarkets prepare to feature product for
spring grilling, he said.
    USDA estimated this week's hog slaughter at 2.201 million
head, up 33,000 from last week and 68,000 more than a year ago.

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