* 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 (Reuters) - 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.
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.
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 decline.
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)