By Theopolis Waters
CHICAGO, Sept 19 (Reuters) – Chicago Mercantile Exchange live cattle futures extended gains on Thursday as fund buying touched off buy stops, traders and analysts said
They said the belief that cash cattle prices are about to forge a seasonal bottom contributed to futures’ advances
And investors tweaked positions before the U.S. Department of Agriculture’s monthly cattle-on-feed report. The data will be released on Friday at 2:00 p.m. CDT (1900 GMT)
Analysts expected Friday’s report to show the number of cattle moved into U.S. feedlots in August dropped to its lowest for the month in 17 years
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While futures’ recent upswing and tight supplies in parts of the U.S. Plains could lend support to cash prices, lackluster wholesale beef demand may weigh on cash
As of Thursday, cash cattle bids in Texas and Kansas were at $121 per hundredweight (cwt) versus a few asking prices of $125, feedlot sources said. Last week, cash cattle in Texas and Kansas traded at $123, and in Nebraska at $123.50
USDA data on Thursday morning showed the wholesale choice beef price, or cutout, at $193.21 per cwt, down 8 cents from Wednesday. Select cuts were up 44 cents to $176.95
Processors likely will not buy cattle until after USDA issues its report on Friday, a trader said
Live cattle October closed 0.650 cent per lb higher at 125.925 cents. December finished up 0.775 cent to 129.725 cents
On Thursday, the September feeder cattle contract closed unchanged at 157.150 cents per lb. It nearly settled inline with CME’s feeder cattle index at 156.77
Other CME feeder cattle months drew support from the higher live cattle market and technical buying
October ended 1.075 cents higher at 159.375 cents while November closed up 1.025 cents at 160.025 cents
Hogs wilt on profit taking:
CME hogs sagged on profit taking in anticipation of cash prices and wholesale pork values topping out soon, analysts and traders said
USDA’s Thursday morning data reported the average hog price in the most-watched Iowa/Minnesota market at $96.61 per cwt, $2.34 higher than on Wednesday
“Hog numbers are tight for whatever reason. That’s pushing hog prices in September back up to where they were in the middle of summer,” a trader said
He said hog prices should come down as cooler weather and cheaper corn quickly allow animals to gain weight, making them more available to processors
Some blame the current supply shortfall on a Midwest heat wave a few weeks ago. High-heat and humidity slowed down hog weight gains and reduced the movement of animals to market
Others contend last summer’s historic drought in the U.S. Plains forced hog farmers to downsize their herds, which resulted in fewer hogs for packers to draw from now
And yet others said the spread of the Porcine Epidemic Diarrhea virus (PEDv), first reported in May and which is fatal to baby pigs, is already starting to draw down supplies
CME October hogs finished 0.575 cent per lb lower at 91.150 cents and December ended at 87.300 cents, 0.650 cent lower.
