* Lower deferred CME cattle pressures feeder cattle
* CME hogs set new highs to narrow discount to cash
By Theopolis Waters
CHICAGO, Oct 25 (Reuters) - Chicago Mercantile Exchange live
cattle futures settled mixed on Friday on profit taking
after setting a record high for a lead contract earlier in the
session.
October live cattle futures closed down 0.225 cent
at 132.575 cents per lb after hitting a nine-month high of
134.900 cents.
December cattle settled up 0.100 cent to 132.975
cents. It set an eight-month high of 134.700 cents.
Late-session profit taking closed October lower to end CME
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live cattle's five-day win streak. The uptrend was driven by
this week's record high cash cattle prices of mostly $132 per
hundredweight (cwt) with help from robust wholesale beef demand.
"Beef demand was on fire, which surprised me. I know there
is reduced product in the pipeline, but still beef prices were
on a tear," Oak Investment Group president Joe Ocrant said.
The smallest U.S. cattle herd in 61 years after lengthy
droughts pushed up cash prices and reduced beef supplies for
grocers and restaurants, analysts and economists said.
With all eyes on next week, investors took profits in
anticipation of packers trimming slaughter to offset tight
supplies and improve their margins.
Supermarkets may be reluctant to buy beef at current prices
amid worries shoppers may turn to less-costly pork and chicken.
Friday evening's USDA wholesale choice beef price was
$200.97 per cwt, down 10 cents from Thursday. Select cuts
slipped 28 cents to $185.40.
U.S. beef packer margins on Friday were estimated at a
negative $41.35 per head, compared with a negative $33.60 on
Thursday and a negative $44.30 a week ago, according to
HedgersEdge.com.
CME feeder cattle finished flat to weak. October futures
were guided by the exchange's feeder cattle index at 165.07
cents. Weak deferred live cattle months and technical selling
undercut other feeder cattle contracts.
October feeder cattle closed unchanged at 165.550
cents per lb. November closed at 166.650 cents, down
0.300 cent and January closed at 166.050 cents, down 0.650 cent.
HOG UP ON DISCOUNT TO CASH
CME lean hog futures climbed to contract highs, partly due
to December's discount to the exchange's latest hog index that
rose to 91.40 cents from 91.25 cents, traders said.
December hogs closed up 0.825 cent at 90.425 cents
per lb after earlier posting a contract high of 90.675 cents in
electronic trading. February settled 0.875 cent higher
at 92.725 cents, after setting a contract high of 92.900 cents.
Investors are closely watching live hogs prices in the
Midwest after trading mixed on Friday.
Friday afternoon's average cash hog price in the western
Midwest market was $84.63 per cwt, down $1.22 from Thursday,
USDA said. USDA average hog price in the eastern Midwest jumped
$3.62 to $71.08 in light volume.
Some packers are coping with a seasonal increase in
supplies, while others are short of hogs for next week's
production.
Investors bought deferred hog futures in anticipation of
fewer supplies next year as the Porcine Epidemic Diarrhea Virus
(PEDv), which is deadly to baby pigs, may spread on U.S. hog
farms during cool autumn weather.
(Editing by Bob Burgdorfer)
LIVESTOCK-US live cattle futures ease after spike to new high
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