LIVESTOCK-U.S. feeder cattle again hit new highs as corn fall

Thu Oct 10, 2013 4:17pm EDT
 
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* CME live cattle up on cash price optimism
    * Hog futures snapback on fund buying, spreads

    By Theopolis Waters
    CHICAGO, Oct 10 (Reuters) - Chicago Mercantile Exchange
feeder cattle futures on Thursday rose to a record high
for the second time this week as reduced corn costs encourage
feedlots to buy young cattle.
    Chicago Board of Trade corn for December delivery 
settled down 5-1/4 cents at $4.38-1/4 a bushel, weighed by
seasonal harvest pressure and talk that the government might
lower its ethanol blending requirements. 
    Firm CME live cattle futures and fewer cattle available for
feedlots to draw from furthered futures' advances, traders said.
    October feeder cattle ended 1.375 cents per lb
higher at 165.925 cents. It earlier hit a new contract high of
166.000 cents in electronic trading. 
    November settled at 167.925 cents, up 1.550 cents
and marked a new contract high of 168.100 cents.
   
    LIVE CATTLE UP WITH CASH HOPES        
    CME live cattle closed firm on short-covering in
anticipation of steady-to-higher cash cattle prices this week,
traders and analysts said.
    They said the live cattle market drew support from the push
by feeder cattle futures to new highs.
    Live cattle October closed 0.300 cent per lb higher
at 128.300 cents while December finished at 132.175
cents, up 0.225 cent.
    Futures' recovery from Wednesday's losses and less cattle
available for sale stirred optimism for cash prices this week,
despite unprofitable packer margins and tepid wholesale beef
demand.
    Isolated cash cattle bids in the U.S. Plains stood at $124
per cwt against $128 and higher asking prices, feedlot sources
said. Cash-basis cattle last week fetched $125 to $126.
    Thursday's wholesale choice beef price, or cutout, was up 33
cents per cwt from Wednesday to $192.30. The select price
slipped 24 cents to $177.68, according to analytical market
research firm Urner Barry.     
    Some packers cutback slaughter to offset tight supplies,
recoup lost margins and underpin wholesale beef prices.
    Urner Barry estimated Thursday's cattle slaughter at 122,000
head of cattle, 1,000 less than a week ago for the same period. 

    HOGS PARE EARLIER LOSSES
    Fund buying and short-covering helped futures shrug off
early-session losses led by lower cash hog and wholesale pork
prices, traders said.
    Spot October finished at 90.250 cents per lb, 0.425
cent higher. December closed up 0.125 cent at 86.650
cents.
    Traders bought spot October and sold deferred months in
anticipation of where the spot month will settle after it
expires on Oct. 14.
    CME Group Inc said that it will increase lean hog
futures surveillance next week to prevent price manipulation
under a pricing formula the exchange adopted to cope with the
shut down of the U.S. government. 
    Dan Norcini, an independent futures trader" called the
exchange's adjusted settlement price system "inherently flawed."
    CME's new settlement calculation is based on the price
movements of hog futures rather than on cash prices, some of
which are still available at terminal markets, he said.
    Terminal hog market prices were mixed on Thursday, according
to analysts and hog buyers. They said some processors have all
the hogs they need for this week's production while others
bought supplies for early next week.
    Hog buyers and traders forecast Saturday's slaughter at
about 145,000 head.