August 23, 2013 / 6:41 PM / 4 years ago

LIVESTOCK-U.S. live cattle futures sag before USDA report

* CME feeder cattle drop on higher corn prices
    * USDA monthly cattle report at 2 p.m. CDT (1900 GMT
    * Short-covering pares earlier hog futures losses

    By Theopolis Waters
    CHICAGO, Aug 23 (Reuters) - Chicago Mercantile Exchange live
cattle futures closed lower  Friday as traders tweaked positions
ahead of the U.S. Department of Agriculture's monthly
cattle-on-feed report expected at 2 p.m. CDT (1900 GMT).
    Analysts polled by Reuters believe the smaller U.S. cattle
herd and high-priced feed resulted in feedlots drawing from
fewer cattle available for feeding now. 
    Spot August live cattle ended down 0.250 cent at 
123.100 cents per lb. Most-actively traded October 
closed 0.500 cent lower at 126.700 cents.
    There were no big moves in futures one way or the other with
the report hanging over the market and cash prices yet to be
decided, Oak Investment Group President Joe Ocrant said. 
    Cash cattle bids in Texas and Kansas stood at $121 per cwt
versus $125 and higher asking prices from sellers, feedlot
sources said. Last week cash cattle in Texas and Kansas traded
at $123 per cwt, and $125 in Nebraska at that time.     
    Investors see producers paying at least steady money for
supplies given their profitable margins. 
    Grocers buying fresh beef to feature during the Sept. 2 U.S.
Labor Day holiday could lend support to cash prices.
    Friday morning, the government quoted the wholesale choice
beef price, or cutout, at $195.94 per cwt, up 10 cents from
Thursday. Select cuts dropped 68 cents to $184.60.
    CME feeder cattle felt pressure from lower live cattle
futures and higher corn prices.
    Fund selling developed after September feeder cattle dropped
below the 20-day moving average of 157.31 cents.
    Spot August feeder cattle closed at 155.000 cents,
down 0.450 cent per lb. Most-actively traded September 
closed 1.050 cents lower at 156.650 cents.

    Short-covering helped CME hogs shrug off early-session
losses caused by the recent downtrend in cash hog and wholesale
pork prices, traders said.
    October hogs finished 0.700 cent higher at 85.100
cents per lb while December ended up 0.650 cent at 
82.250 cents.
    "You had funds fighting to protect their massive long
positions in the market," a trader said.
    Buying interest developed when October and December futures
approached their key 100-day moving averages of 83.61 cents and
80.60 cents, respectively.
    Lower cash hog and wholesale pork values at times prompted
selling as futures rallied.
    Packers resisted raising cash hog bids as supplies increase
seasonally, making more fresh pork available to end users. 
    And supermarkets are not booking large orders of pork as
they are close to having all they need for their Labor Day
grilling promotions.    
    The government on Friday morning quoted the average hog
price in the eastern Midwest market 90 cents per hundredweight
(cwt) lower from Thursday, to $91.50.
    USDA estimated that packers this week will process 2.207
million hogs, up 30,000 from last week and 65,000 more than a
year ago for the same period.
    Government data on Friday morning showed the wholesale pork
price, or cutout, at $98.59 per cwt, $1.36 lower than Thursday.

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