By Meredith Davis
CHICAGO, Nov 18 (Reuters) – Chicago Mercantile Exchange live cattle futures closed sharply lower on Monday on fund liquidation in a technical selloff with spot December ending down 1.24 percent, traders and analysts said.
Spot December fell to a one-month low in earlier dealings and, though paring losses, still ended near the session low.
A large sell stop was placed which led to a sell-off but traders and analysts gave no fundamental reason for the decline.
Wholesale beef prices, while still high, have retreated from lofty levels as the Thanksgiving holiday approaches, with its focus on turkey and ham.
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“It is really a cautious market because it is not a good time of a year for demand. There will not be retail features for beef until the first of the year,” said Lane Broadbent, an analyst at KIS Futures.
The U.S. Department of Agriculture reported Monday morning’s choice beef wholesale price at $200.98 per cwt, down 18 cents from Friday. The choice wholesale price is the lowest since $200.97 on Oct. 25.
Beef packer margins descended further into negative territory after packers paid up for cattle in the cash market last week. Packers in Texas and Kansas paid $132 per cwt on Friday for slaughter-ready cattle, $1 higher than the previous week.
HedgersEdge reported beef packer margins at a negative $36.50 per head on Monday, down from a negative $29.70 per head on Tuesday and negative $32.55 a week ago.
The selloff in cattle futures occurred amid the report of lucrative profits reported by a key livestock and chicken processor.
Tyson Foods Inc reported a 28 percent jump in quarterly profit on Monday, helped by higher chicken sales and a rebound in its beef business, and said it expected to benefit from lower grain costs this fiscal year.
Chicago Board of Trade corn futures fell to a three year low on Monday and some analysts said the market likely would fall further.
CME live cattle December finished down 1.500 cents per lb at 131.900 cents, and February closed at 133.200 cents, up 1.600 cents.
Feeder cattle futures followed CME live cattle futures lower but the weak Chicago Board of Trade corn prices limited losses.
November feeders closed down 0.300 cent at 164.850 cents per lb, and January ended at 164.300 cents, 1.525 cents lower on the day.
WEAK CASH PRICES PRESSURE HOGS
CME hogs were pressured by weak cash prices while improved wholesale pork cutout values limited losses, traders and analysts said.
Monday morning’s cash hog prices in the closely watched Iowa/Minnesota market were unquoted. But in the eastern direct market prices were at $78.36 per cwt, down $1.69 from Friday, USDA said.
Hogs in the U.S. Midwest are traded steady to $1 per cwt lower, according to hog brokers.
The government’s Monday morning wholesale pork price rose 72 cents from Friday to $92.69 per cwt. Pork bellies, which are made into bacon, rose by $5.24 to $131.76.
December hogs ended up 0.300 cent at 85.600 cents per lb, while February closed up 0.375 cent at 89.900 cents.
