By Theopolis Waters
CHICAGO, Nov 4 (Reuters) – Chicago Mercantile Exchange live cattle and hog futures on Monday gained in quiet trading as funds sold, or rolled, December futures and bought deferred months, traders and analysts said.
Those funds moved long positions further out before a similar process, known as the “roll”, expected to be made later this week by followers of the Goldman Sachs Commodity Index.
Funds that follow the index will shift their December long positions mainly into February and April. That shift will be for five days starting Nov. 7.
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CME live cattle December finished up 0.025 cent at 132.100 cents, and February closed at 133.675 cents, up 0.200 cent.
Both trading months held above their respective 40-day moving averages of 131.58 cents and 133.25 cents.
Traders are waiting for cash cattle to trade following last week’s mostly $132 per hundredweight sales, Citigroup futures specialist Art Liming said.
“Based on last week’s trade, we’ve got a good idea about where cash is, but no great idea about where it’s going,” Liming said.
In parts of the Midwest, more cattle are available after packers bought sparingly last week. Elsewhere, processors may have to compete for tight supplies.
Investors are keeping tabs on beef demand that tends to slow as turkey and ham dominate U.S. Thanksgiving Day holiday supermarket advertisements.
Monday morning’s wholesale choice beef price was $205.30 per cwt., up 70 cents from Friday. Select cuts were at $189.03, down 11 cents, according to the U.S. Department of Agriculture.
CME feeder cattle drew support from the firm live cattle market.
November closed up 0.100 cent per pounds at 163.600 cents, and January ended at 163.850 cents, 0.375 cent higher.
FUNDS ROLL LIFT DEFERRED HOGS
CME hog’s finished flat to higher as funds sold, or rolled, their December long positions into back months, traders said.
The “roll” and weaker cash hog prices kept a lid on the December hog contract.
USDA reported hog prices Monday afternoon in the most-watched Iowa/Minnesota market fell $2 per cwt. to $81.79 cents.
“Packers have more hogs to deal with and other pork items could take a back seat to ham featuring for Thanksgiving,” a trader said.
Monday afternoon’s wholesale pork price was at $94.92 per cwt., up 87 cents from Friday. The price for hams jumped $2.35, according to the USDA.
December future’s movement was limited by its close proximity to the exchange’s hog index, which was at 88.51 cents.
December hogs ended down 0.025 cents at 88.325 cents. It bounced off its 40-day moving average support level of 87.93 cents.
Meanwhile, distant hog months benefited from the “roll” and speculative buying led by worries about the spread of the Porcine Epidemic Diarrhea virus (PEDv).
PEDv, which is fatal to piglets, has recently spread on U.S. hog farms and can hurt production in 2014.
February hogs ended up 0.350 cents at 91.575 cents, and April closed 0.575 cent higher at 93.450 cents.
