By Theopolis Waters
CHICAGO, Jan 8 (Reuters) – Chicago Mercantile Exchange live cattle posted steep losses, and had fallen by its 3 cents per pound daily limit in electronic trading, led by fund liquidation that overshadowed initial fundamental support, traders said.
Fund selling accelerated after February and April drifted below their respective 100-day moving averages of 163.37 cents and 162.35 cents.
Pit-traded live cattle February and April ended 2.300 cents lower at 163.600 cents and 162.425 cents, respectively.
This week, market-ready or cash cattle in the U.S. Plains sold at $168 to $172 per hundredweight, up from $166 to $169 last week, feedlot sources said.
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The morning’s Choice wholesale beef price climbed $2.26 per cwt from Wednesday to $255.01. Select cuts jumped $3.34 to $245.46, according to the USDA.
Wintry weather tightened supplies for packers who had not bought enough cattle for plants that returned to normal operations after the New Year’s holiday.
Grocers featuring beef through the middle of February are paying more after packers increased costs to compensate for high-priced cattle.
Thinly traded CME feeder cattle felt pressure from technical selling and heavy live cattle losses, which sank electronic deferred months by their 4.500-cents price limit.
Pit-traded feeder cattle January closed down 0.025 cent per lb. to 225.625 cents, March 3.275 cents lower at 217.050 cents, and April finished down 3.725 cents to 216.425 cents.
FUNDS SELL HOGS
CME lean hogs on Thursday sank to their lowest level since March 2013 on liquidation by funds as part of their annual rebalancing of commodity positions, traders said.
Funds trading in CME’s lean hogs and live cattle markets simultaneously sold February long positions and bought deferred months.
Speculative buyers waited for signs of a seasonal bottom in prices for market-ready or cash hogs as packers work through animals that had backed up on farms during the New Year’s holiday.
On Thursday morning, the average price of cash hogs in the Iowa/Minnesota market had dropped 78 cents per cwt. from Wednesday to $73.37, the U.S. Department of Agriculture said.
February closed 1.150 cents per lb. lower at 78.175 cents, and April finished down 1.925 cents to 79.950 cents.
