* Speculative buyers push up live cattle futures
* CME hogs spike amid futures' discount to cash
By Theopolis Waters
CHICAGO, July 15 (Reuters) - Chicago Mercantile Exchange
feeder cattle futures hit a 6-month high Monday led by
CME live cattle market gains and lower-priced corn, said traders
Favorable crop growing conditions in the U.S. Midwest
pressured CBOT corn.
Less-costly corn could reduce cattle feeding costs and
encourage feedlots to buy more younger cattle.
Corn futures fell Friday after CME feeder cattle closed,
R.J. O'Brien floor manager Jim Brooks said. And there is
anticipation of a higher cash feeder cattle market, he said.
August CME feeder cattle closed at 152.650 cents,
2.525 cents per lb higher. September settled at 155.150
cents, up 2.425 cents.
LIVE CATTLE RISE AS SPECS BUY
Speculative buying with the belief that CME live cattle have
bottomed out seasonally lifted futures, according to analysts
Futures gained further after August and October broke
through their respective 10-day moving averages, which stirred
CME live cattle August finished at 122.450 cents, up
0.600 cent per lb. It finished above the 10-day moving average
of 122.107 cents.
October closed at 126.675 cents, up 0.600 cent and
above the 10-day moving average of 126.295 cents.
Investors wait for this week's cash cattle sales.
Last week, cash cattle in the U.S. Plains lightly traded at
$119 to $120 per cwt, which was roughly steady with the week
before, feedlot sources said.
Beef packers will be leery about actively purchasing cattle
given tepid wholesale beef demand and waning margins.
USDA on Monday morning reported the wholesale price of
choice beef at $191.15 per hundredweight (cwt), down 38 cents
from Friday. Select cuts were up 14 cents to $183.81.
HOGS UP ON DISCOUNT TO CASH
Spot-July CME hogs' modest discount to the exchange's hog
index at 102.98 cents attracted buyers, pushing the contract to
a new high before it expired at noon CDT (1700 GMT).
CME July hogs settled up 0.200 cent per lb at
102.300 cents. It marked a new contract high of 102.500 cents in
Buyers bought August, the new lead trading month, because of
its price discount to July futures before it expired.
And spread traders bought August and sold deferred contracts
as corn prices weakened. The spread boosted August above the
40-day moving average where fund buyers were waiting.
August closed 0.650 cent higher at 95.550 cents and
October finished 0.500 cent higher at 84.700 cents.
Selling in anticipation of weaker trending cash hog and
wholesale pork prices pulled futures from morning tops.
"I don't know how much this rally has left without
confirmation from continued higher cash and cutout. I'd be
surprised if we get that," said independent livestock futures
trader Dan Norcini.
Pork processors will curtail slaughter rates and reduce cash
hog bids to recover lost margins. And beef prices have come down
enough to lure shoppers away from pork.
USDA data showed the average hog price on Monday morning in
the eastern Midwest market down $1.40 per cwt from Friday to
The government's Monday morning mandatory wholesale pork
price, or cutout, was $101.10 per hundredweight (cwt), which was
$1.90 lower than on Friday.
(Editing by Chris Reese)