By Theopolis Waters
CHICAGO, Sept 14 (Reuters) – Chicago Mercantile Exchange live cattle closed higher on Monday after short-covering trumped follow-through selling that initially pressed futures to a 15-month low, traders said.
Spot-October closed up 0.875 cent per lb at 141.475 cents, and December was 0.800 cent higher at 143.175 cents.
October was further supported by fewer cattle for sale this week and that contract’s discount to the top end of last week’s market-ready, or cash, cattle price range.
Last week, cash cattle in the U.S. Plains sold at $139 to $142 per cwt, compared to $142 to $143.50 the week before, said feedlot sources.
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As the harvest in southern Alberta presses on, a broker said that is one of the factors pulling feed prices lower in the region. Darcy Haley, vice-president of Ag Value Brokers in Lethbridge, added that lower cattle numbers in feedlots, plentiful amounts of grass for cattle to graze and a lacklustre export market also weighed on feed prices.
Lower wholesale beef values and uncertainty about cash prices later in the week pulled CME live cattle from session highs.
Monday morning’s wholesale choice beef price, or cutout, fell $1.23 per cwt to $234.86 from Friday. Select cuts slipped 22 cents to $226.51, the U.S. Department of Agriculture said.
Monday’s market gain was “not a runaway.” The thing that we’re getting backwards is that cash is not leading the way,” said KIS Futures Inc Vice President Lane Broadbent.
Funds trading CME livestock futures periodically shifted October long positions into back months in a process known as the “roll” by followers of the Standard & Poor’s Goldman Sachs Commodity Index.
Monday was the last official day for the S&PGSCI roll process.
Sell stops, higher corn futures and soft cash feeder cattle prices weighed on CME feeder cattle, with September closing 0.550 cent lower at 200.150 cents.
CASH WOES HIT HOG FUTURES
Plentiful hog supplies that caused the more than two-week slide in cash prices deterred CME lean hog futures buyers, traders said.
Spot October ended down 0.500 cent per lb at 66.825 cents, and December closed 0.400 cent lower at 62.250.
The government quoted the morning’s average cash hog price in Iowa/Minnesota at $66.85 per cwt on light sales volume, 66 cents lower than on Friday.
Some traders sold nearby contracts and simultaneously bought deferred months with the view that farmers will raise fewer hogs later if corn prices remained high.
Still, supermarkets stocking up on product for National Pork Month in October cushioned the lean hog October contract’s fall.
Monday morning’s wholesale pork price was up $1 per cwt from Friday to $85.66, led by $3.11 higher costs for pork bellies, the USDA said.
