U.S. cattle down on weak beef; hogs fade

 U.S. live cattle futures ended down on Thursday on pressure from weak cash cattle and wholesale beef markets, and feeder cattle fell on signs feed costs may again be rebounding, analysts and traders said.
 "Cattle were technically weak and I think fundamentals are weak but I’m bearish so let’s just say it’s choppy," said Jim Clarkson, a broker for A&A Trading Inc.
 Cattle rallied early in the session in step with strong gains in the stock market and on spreading but the gains did not hold, leading to the choppy market action.
 "The early gains were due to bull-spreading, buying the December and selling February, but once that ended it turned down," Clarkson said.
 Chicago Mercantile Exchange (CME) December live cattle were down 0.600 cent at 125.325 cents per lb and February was down 0.650 at 129.225.
 Traders and analysts said the cattle market was dealing with lower cash sales on the hoof in the feedlot areas of the U.S. Plains and also a temporary lowering of beef consumption as a fallout from Hurricane Sandy that devastated the East Coast, snarling shipments of beef and slashing retail usage.
 "Fundamentals are weakening and the big drop in slaughter to 111,000 indicates a continued slowdown. Also, the big drop in boxed beef for choice grade by $3.40 should keep cattle under pressure," said Dennis Smith, a broker for Archer Financial.
 Choice beef fell over $3 late on Wednesday and eased another 0.21 cents per cwt early on Thursday.
 Hurricane Sandy, which caused a potential $50 billion loss, created huge logistical problems. There were power failures and navigational hazards that rocked the massive New York Harbor oil hub.
 Analysts said the historic storm also kept beef from moving to the East Coast, and residents were busy mopping up after the storm rather than dining on steaks and burgers.
 "East Coast orders have pretty much stopped. I don’t think there is much moving from Cleveland eastward," said Jack Salzsieder, analyst for K&S Financials.
 The cattle market already was finding pressure from weaker cash markets, they said.
 "Cash cattle in Kansas and Nebraska trading at $126 were off a dollar from last week," Smith said.
 HedgersEdge.com LLC reported packer beef margins on Nov. 1 at a negative 78.95 compared with a negative 55.90 Oct. 31 and a negative 18.80 a week ago.
 Cattle slaughter on Thursday was estimated at 126,000, unchanged from a week ago and below the year ago tally of 128,000 head.
 Feeder cattle futures fell on spillover selling from the lower cattle markets and on higher Chicago Board of Trade (CBOT) corn futures
 that led to concerns about further cuts in feeding profits. November feeder cattle were down 1.650 cents per lb at 144.650 cents and January  was down 2.350 at 146.350.

 Lean hogs bump into chart resistance
 Lean hog futures turned down late in the trading session on a lack of bullish momentum during modest investor buying that had pushed the spot December contract into chart resistance levels.
 "Hogs being up were confounding me a little but there is resistance in the December near 79," Smith said.
 The recent high for December was 79.800 set on Oct. 19.
 The 200-day moving average for the December contract is at 78.819. CME December hog futures
 were trading at 77.875 down 0.400. February was down 0.325 at 84.150.
 U.S. Midwest cash hogs were mostly steady to 50 cents per cwt lower on abundant supplies and as packers had met their supply needs for this week’s commitments and were purchasing for next week, dealers said.
  Traders and analysts said there was modest speculative buying of hog futures tied to the fact hogs were at a significant discount to cattle.
 HedgersEdge.com LLC reported the packer margin on Thursday at a positive 4.75 compared with a positive 2.10 on Wednesday and a negative 1.35 a week ago.
 The USDA reported the pork cutout values on Wednesday rose by 99 cents to $85.79 per cwt.

Sam Nelson reports for Reuters in Chicago

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