LIVESTOCK-US live cattle futures slip on profit-taking

Fri Aug 9, 2013 1:14pm EDT
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By Theopolis Waters
    CHICAGO, Aug 9 (Reuters) - Chicago Mercantile Exchange live
cattle futures on Friday fell on profit-taking after recent
gains fueled by Tyson Foods' plans to no longer buy cattle given
the feed additive Zilmax, traders and analysts said.
    In a letter to feedlot operators, Tyson Foods Inc,
the country's largest meat processor, said it will suspend
purchases of cattle given the growth additive Zilmax, starting
Sept. 6. They said they made the decision after some cattle
arrived at its plants having trouble walking, possibly because
of the added weight.   
    CME live cattle traders bought deferred-month contracts in
the belief that not using the additive would result in lighter
cattle that could drive up beef prices.
    "It appears to us that the market is overreacting to an
anticipated tonnage reduction," said Hales Cattle president
David Hales.
    He pointed out that other packers continue to process
Zilmax-fed cattle. If those processors decided to stop
processing Zilmax-fed cattle, they would switch to Optaflexx,
another growth enhancer, Hales said.
    Cash cattle bids in the Southern Plains stood at $117 per
cwt, with no response from sellers, feedlot sources said. 
    Last week, cash cattle in Texas traded at $119 per cwt and
mostly at $119 in Kansas, with some at $120 per cwt. A week ago
most live-basis cattle in Nebraska sold at $120.50.     
    The U.S. Department of Agriculture on Friday quoted the
wholesale price of choice beef at $188.49 per cwt, up 18 cents
from Thursday. Select cuts were down 10 cents to $182.05.
     At 11:33 a.m. CDT (1633 GMT) spot-August live cattle
futures were down 0.150 cent at 122.525 cents per lb.
October slipped 0.125 cent to 126.950 cents per lb.