By Theopolis Waters
CHICAGO, Sept 17 (Reuters) – Chicago Mercantile Exchange live cattle futures on Thursday hit a 16-month bottom, falling to contract lows for a second straight session, on lower wholesale beef values and further cash price weakness, traders said.
Spot-October closed 0.750 cent per pound lower at 136.850 cents, and earlier marked a contract low of 136.525. December ended at 139.325 cents, down 0.150 cent and made a new low of 138.875.
The morning’s wholesale Choice beef price fell $1.43 per cwt to $231.98 from Wednesday. Select cuts slumped $2.69 to $222.34, the U.S. Department of Agriculture said.
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Earlier on Thursday, a few market-ready, or cash, cattle in Kansas moved at $136 per cwt., steady with Wednesday but still $4 to $6 lower than last week in the state, feedlot sources said.
On Wednesday, Nebraska cash cattle moved at $135 to $136, down as much as $4 there from a week ago, the feedlot sources said, adding that Texas sellers priced cattle at $143 to $144 with no bids from packers.
Feedyards are paid less for heavyweight cattle when beef demand typically slows after Labour Day, traders and analysts said.
Some investors adjusted positions before the USDA’s monthly Cattle-On-Feed report on Friday.
Lower cash feeder price expectations pressed CME feeder cattle contracts to new lows for a second day in a row.
September finished 0.925 cent per lb. lower at 193.200 cents and made a fresh contract low of 192.600.
HOG FUTURES CLIMB
CME lean hogs were strengthened by short-covering and bargain hunting, traders said.
“Earlier this year, everyone wanted to be bullish cattle and bearish hogs. Now, its the complete opposite,” said independent livestock futures trader Dan Norcini.
Technical buying developed after October and December earlier rolled through their respective 200 and 100-day moving averages of 70.16 and 64.33 cents.
Spot October ended 2.325 cents per lb. higher at 70.575, and December up 2.275 cents at 64.350.
Late-Wednesday’s firm cash prices contributed to Thursday’s rally, but processors may trim cash bids after booking enough for this week’s production, the traders said.
Cash hogs in the Midwest on Thursday were steady versus $1 per cwt. higher on Wednesday, according to regional hog dealers.
Investors are monitoring pork cutout values as supermarkets finalize product purchases for National Pork Month in October.
The morning’s wholesale pork price had dropped 86 cents per cwt from Wednesday to $82.78, USDA said.
