LIVESTOCK-U.S. live cattle futures mixed, Merck lifts back months

Fri Aug 16, 2013 6:03pm EDT
 
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* Cash cattle prices up $2 from last week
    * CME feeder cattle gain as corn slide
    * Lower cash prices weaken hog futures

    By Theopolis Waters
    CHICAGO, Aug 16 (Reuters) - Chicago Mercantile Exchange live
cattle futures on Friday settled mixed after a choppy session.
    August live cattle futures closed up 0.200 cent at
123.900 cents per lb and October settled at 127.925
cents, off 0.175 cent.
     Rising wholesale beef prices and higher cash cattle prices
encouraged CME live cattle August futures buyers.
    The October contract's wide premium compared with August
futures stirred profit taking.
    Cash cattle in Texas and Kansas fetched $123 per
hundredweight (cwt), up $2 from last week, feedlot operators
said.
    U.S. Department of Agriculture data on Friday afternoon
reported the wholesale price of choice beef, or cutout, up $1.09
cents per cwt from Thursday to $194.39. Select cuts rose 68 to
$186.39.
    The overall beef cutout gained for a sixth straight day,
lending support to cash cattle prices.
    There are fewer cattle around and grocers are buying beef
for the Sept. 2 U.S. Labor Day holiday demand, traders said.
    Distant live cattle futures snapped back from session lows
partly on news that U.S. pharmaceutical company Merck & Co
 will temporarily suspend sales of the cattle growth
additive, Zilmax, in the United States and Canada.
    Merck said it made the decision following concerns about use
of the product, which is given to cattle to increase their
weight before slaughter. 
    Analysts and traders said discontinuing Zilmax could bring
down cattle weight, which means less beef at higher prices.
    "The market is looking at it and saying that the Zilmax
thing won't affect us until much later, even though feedlots can
still feed other growth additives," U.S. Commodities analyst Don
Roose said.
    CME feeder cattle drew support from higher deferred-month
live cattle futures and fallen corn prices. 
     August feeders closed at 154.775 cents, 0.675 cent
per lb higher. September closed up 0.600 cent to 157.675
cents.

   CASH PRESSURES HOG FUTURES 
   Lower cash hog prices generated profit taking, which put
pressure on CME hogs for a second straight session, traders
said. 
   CME hog October and December closed 0.575
cent per lb lower at 86.725 cents and 83.450 cents,
respectively.
   The USDA data showed the average hog price at the closely
watched Iowa/Minnesota market on Friday afternoon at $94.01 per
cwt, $3.01 lower than on Thursday.      
    The industry is coming bigger hog numbers seasonally, which
is limiting packer demand for supplies, said Archer Financial
Services broker Dennis Smith. 
    Packers are on track to slaughter 2.177 million hogs this
week, 158,000 more than last week and up 1,000 head from last
year, according to USDA estimates.