U.S. livestock: Live cattle futures end higher on fund buying

Chicago Mercantile Exchange live cattle futures settled higher on Tuesday, supported by fund buying while investors await cash cattle to trade this week, traders and analysts said.

December cattle traded through both the 10-day and 20-day moving averages. The front-month contract settled up 0.875 cent per pound at 131.95 cents, just above the 10-day moving average (all figures US$).

February cattle traded through the 100-day moving average of 131.921 cents/lb. to settle at 133.025, up 1.1 cents.

“It is a technical based rally,” said Lane Broadbent, livestock analyst at KIS Futures. “There maybe a little beef demand at year-end, but otherwise there is not a lot of news.”

Analysts have said grocers may chose to feature beef products after selling turkey and ham for the U.S. Thanksgiving holiday.

The U.S. Department of Agriculture’s Tuesday morning wholesale beef prices were mixed with choice cuts down 13 cents from Monday at $201.19 per hundredweight (cwt). Select cuts were up 43 cents at $188.71/cwt.

Cash cattle were expected to trade at least steady with last week’s price of $131/cwt, or possibly higher, traders said.

Packers have not yet bid for cattle but animals in the U.S. Plains were priced at $132 to $134, feedlot sources said. Cattle bought this week will be for post-Thanksgiving beef production, which is supportive for cash prices.

Weak Chicago Board of Trade corn prices lent support to CME feeder cattle. U.S. corn futures fell 1.5 per cent on Tuesday, weighed down by the ample supplies as the harvest of a likely record-large U.S. crop neared an end, traders said.

January feeder cattle ended 1.575 cents/lb. higher at 164.375 cents, while March ended at 164.3, up 1.5 cents.

Steady cash prices support hogs

CME hog futures settled higher in thin trade supported by steady cash prices as packers made purchases for a large weekend slaughter, traders said.

Packers geared up for a big Saturday slaughter that traditionally takes place following Thanksgiving due to plants being down on Thursday’s holiday, traders said.

“Packers are putting steady cash on the table to make sure they have plenty of hogs surrounding them as margins are quite profitable,” said Dan Norcini, an independent livestock futures trader.

Cash hog prices as reported by USDA in the closely watched Iowa/Minnesota direct market were not available early on Tuesday, but Midwest hog brokers expected steady cash trade.

The wholesale pork price, or cutout, continued its downtrend as a steady slaughter pace of record heavy hogs put additional pork in the pipeline.

USDA on Tuesday morning reported the wholesale pork price was down 32 cents from Monday at $88.86/cwt.

The extent of the impact of the porcine epidemic diarrhea virus (PEDv) on hog supplies in the spring and summer 2014 remains unclear, but expectations that supplies will be reduced supported deferred month contracts, analysts said.

December hogs closed up 0.025 cent at 85.625 cents/lb. February hogs closed up 0.6 cent at 90.4 cents.

— Meredith Davis reports on U.S. ag commodities for Reuters from Chicago.

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