LIVESTOCK-U.S. live cattle futures slump in fund selloff

Thu May 30, 2013 4:40pm EDT
 
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* Wholesale beef price setback weighs
    * CME hogs up on cash, Smithfield news

    By Theopolis Waters
    CHICAGO, May 30 (Reuters) - Chicago Mercantile Exchange live
cattle slumped on Thursday as futures fell below technical
support triggering fund liquidation, traders and analysts said.
    CME live cattle June dropped beneath the respective
40-day and 20-day moving averages of 121.069 and 120.643 cents.
It closed at 120.350 cents, or 1.025 cent per lb lower.
    August drifted below the 20-day and 10-day moving
averages of 120.200 and 119.327 cents. It finished 1.350 cent
lower at 119.050 cents.
    Slipping wholesale beef prices put investors in a selling
mood while waiting for cattle in the cash market to change
hands.
    Cash cattle bids in Texas and Kansas stood at $122 per
hundredweight versus $126 asking prices, said feedlot sources.
Cattle last week moved at $124 to $125.50.
    U.S. Department of Agriculture data on Thursday afternoon 
quoted the wholesale price of choice beef down 98 cents per
hundredweight from Wednesday to $208.55 per cwt. Select cuts
were at $189.09, $1.24 cents lower.
    "Packers don't act particularly aggressive but margins are
good and they will be looking for cattle for a full kill next
week," Hales Trading Co president David Hales said.
    HedgersEdge.com calculated U.S. beef packer margins on
Thursday at a positive $75.25 per head, compared with a positive
$68.35 on Wednesday and positive $89.80 a week earlier.   
    However, more cattle available for sale this week and
futures' pullback on Thursday present challenges for cash
prices.
    CME feeder cattle fell in sympathy with lower live cattle
futures and chart-related selling.
    August ended 1.450 cents per lb lower at 144.175
cents and September settled at 146.350 cents, or 1.425
cents lower.
  
    CASH LIFTS HOGS    
    Cash price strength lifted CME hogs, traders and analysts
said.
    Thursday afternoon's USDA data showed the average hog price
in the most-watched Iowa/Minnesota market at $93.44 per
hundredweight, $1.14 higher than on Wednesday.   
    Packers are gearing up for a Saturday slaughter estimated at
 around 200,000 head to make up for plants closed during last
Monday's Memorial Day holiday, a trader said.
    Wednesday's news of the pending sale of Smithfield Foods
 to China's Shuanghui International $4.7 billion helped
underpin late-fall delivery hog futures.  
    "If the sale goes through it would be great for U.S. pork
exports. But it's hard for me to get excited without knowing all
the details," a trader said.
    Anticipation of lower cash hog prices early next week as
processors attempt to realign their margins curbed CME hog
futures' advances.
    And wholesale pork values encountered retail buying
resistance at current price levels, which at times contributed
to futures' selling.
    The government's Thursday afternoon mandatory wholesale pork
price, or cutout, calculated on a plant-delivered basis, was
$95.03 per hundredweight, down 5 cents from Wednesday.
   June hogs closed 0.600 cents per lb higher at 95.325
cents and July ended at 93.475 cents, up 0.475 cent.