By Theopolis Waters
CHICAGO, Nov 4 (Reuters) – Chicago Mercantile Exchange live cattle futures settled mostly moderately higher after a choppy session dominated by sporadic profit-taking and preliminary “rolling” by funds ahead of similar moves on Friday, traders said.
Many fund are starting to “roll” their long December positions into defered months, mostly February.
December closed down 0.400 cent per pound at 166.650 cents. February ended at 167.400 cents up 0.125 cent and April 0.475 cent higher at 166.275 cents.
Cattle market participants were on the defensive for most of the session while waiting for market-ready or cash cattle to change hands.
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Feedlots in the U.S. Plains have priced their cattle at more than $170 per hundredweight (cwt.) There was no response from packers who are grappling with tepid wholesale beef sales and unprofitable margins.
Tuesday morning’s Choice wholesale beef price dropped 65 cents per cwt from Monday to $250.08. Select was unchanged at $239.40, based on USDA data.
But some packers may need cattle after buying fewer of them last week. Other processors are working to fulfill pre-booked meat orders from supermarkets looking to feature rib-eye steaks and roasts this fall and winter.
CME feeder cattle drew support from lower corn prices, back-month live cattle gains and $1 to $4 higher returns for feeder cattle in local markets.
November closed 1.550 cents per lb higher at 237.125 cents, and January ended at 231.600 cents, up 1.800 cents.
LOWER PORK PRESSURE HOGS
Lean hogs posted losses on Tuesday, weighed down by profit-taking and lower wholesale pork prices that erased early session advances, traders said.
December ended down 0.875 cent per pound at 87.975 cents, and February was 1.200 cents lower at 87.800 cents.
The morning’s wholesale pork price, or cutout, sagged $1.76 per cwt. from Monday to $96.18, largely due to the $10.98 plunge in pork belly costs, the U.S. Department of Agriculture said.
“There were some people buying futures, then the market failed,” said JBS Trading president James Burns, referring to bargain hunting prior to the pork cutout’s retreat.
Investors worry that packers’ inability to consistently move pork could pressure cash prices in the near term as supplies grow seasonally.
USDA estimated Monday and Tuesday’s combined hog slaughter at 864,000 head, 9,000 more than a week ago.
Fund selling surfaced after December and February drifted below their respective 10-day moving averages of 88.87 cents and 88.15 cents.
Traders sold deferred contracts with the view that less-costly corn might encourage producers to expand their herds and fatten hogs to heavier weight.
