LIVESTOCK-US live cattle futures rebound with cash prices

Fri May 31, 2013 5:31pm EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

* Fund buying, short-covering lend more support
    * CME live cattle underpins feeder cattle futures
    * Hogs firm as funds buy despite cash slide

    By Theopolis Waters
    CHICAGO, May 31 (Reuters) - Chicago Mercantile Exchange live
cattle futures closed higher on Friday as steady cash prices
helped futures recover from Thursday's sell-off, traders and
analysts said.
    Cash cattle in the U.S. Plains traded at $124 to $125 per
hundredweight on Friday, which was mostly steady with last week,
said feedlot sources.
    "Packers needed cattle for next week but didn't overpay
because of ample supplies," said Oak Investment Group President
Joe Ocrant.
    Fund buying and short-covering on the last trading day of
the month put futures up marginally for the week.
    But CME live cattle were down 5.8 percent for the
month of May - their biggest monthly decline since 11.36 percent
in May 2011.
    "It doesn't matter that beef prices are at historic highs
and futures are way underpriced versus cash, the market kept
going down in search of the summer seasonal lows," a trader
said. 
     June live cattle futures closed above their
respective 20-day and 40-day moving averages of 120.525 and
121.042 cents, triggering fund buying. They closed at 121.300
cents, up 0.950 cent per lb.
    August punched through the 10-day and 20-day moving
averages of 119.405 and 120.031 cents, finishing 1.400 cents
higher at 120.450 cents.
    Futures gained traction despite sagging wholesale beef
values. Supermarkets have what need for the weekend, traders
said.
    U.S. Department of Agriculture data on Friday afternoon 
quoted the wholesale price of choice beef, or cutout, down $1.90
cents per hundredweight from Thursday at $206.65. Select cuts
were at $187.20, $1.89 cents lower.
    Feeder cattle futures drew support from the gains in CME
live cattle while firmer corn prices limited advances.
    CME feeder cattle ended flat for the week and up 3.4 percent
for the month.
    August feeder cattle futures ended up 0.150 cent per
lb to 144.325 cents and September settled at 146.575
cents, or 0.225 cent higher.
  
    HOGS GAIN ON FUND BUYING
    CME hogs gained modestly as fund buying offset selling
prompted by lower cash hog and wholesale pork prices, said
analysts and traders.
    "Funds did all the buying guided by their technical
indicators," said independent livestock futures trader Dan
Norcini.
    Local and commercial traders may have sold anticipating cash
hog and the pork prices may be near their seasonal peaks.
    "One has to wonder how much longer will packers continue to
chase hogs given the state of what's going on fundamentally,"
said Norcini.
    Friday afternoon's USDA data showed the average hog price in
the most-watched Iowa/Minnesota market at $91.15 per
hundredweight, $2.09 lower than on Thursday.
     The government's Friday afternoon mandatory wholesale pork
price, or cutout, calculated on a plant-delivered basis, was
$94.31 per hundredweight, down 72 cents from Thursday.
     CME hogs closed up nearly 1 percent for the week
while rising 6.1 percent for the month. 
   June hogs closed 0.300 cent per lb higher on Friday
at 95.625 cents and July gained 0.375 to 93.850 cents.