LIVESTOCK-US live cattle futures up with seasonal cash hopes

* Cheaper corn drives up feeder cattle futures
    * Mixed CME hogs on discount to cash, spreads

    By Theopolis Waters
    CHICAGO, July 29 (Reuters) - Chicago Mercantile Exchange
live cattle on Monday gained for a third straight session in
anticipation of a seasonal uptrend in cash cattle prices, said
analysts and traders.
    Last summer's drought forced ranchers to send cattle to
market ahead of schedule, resulting in fewer cattle now. And
improved grazing conditions are keeping cattle out of feedlots
longer for fattening.
    "Despite lower wholesale beef prices, futures' momentum has
turned higher with traders getting ahead of the seasonal
turnaround in cash," Oak Investment Group president Joe Ocrant said. The U.S. Department of Agriculture on Monday morning quoted the wholesale price of choice beef at $186.52 per hundredweight (cwt), which was down 63 cents from Friday. Select cuts slipped 16 cents to $182.55 cents. The break from hot weather that sidelined outdoor cookouts could reignite beef demand, Ocrant said. Investors wait for feedlots to count the number of cattle available for sale this week. Last week, cash cattle in Texas and Kansas traded steady with the prior week's $119 per cwt. Live-basis cattle in Nebraska sold at $120.25, up 25 cents from the prior week. August live cattle finished 0.300 cent per lb higher at 122.100 cents and October closed at 125.975 cents, or up 0.125 cent. Modest CME live cattle gains and weak corn prices boosted CME feeder cattle. Higher cash feeder cattle prices at the closely-watched Oklahoma City market offered more futures' support. August closed at 153.275 cents, up 0.675 cent per lb and September at 156.850 cents, or 0.850 cent higher. MIXED HOGS ON SPREADS CME hog August futures' discount to the exchange's hog index at 100.35 cents stirred bullish spreads, said traders and analysts. August hogs closed at 97.900 cents per lb, or up 0.125 cent and October at 84.500 cents, down 0.300 cent.
The discount between August futures and the index is slowly eroding, said independent hog futures trader James Burns. October is expected to be in worse shape as cash hog prices come down seasonally, he said. Hog numbers tend to build seasonally in the fall when cooler temperatures help animals reach slaughter weight quicker. On Monday, tepid wholesale pork demand and slumping operating margins prompted packers to trim cash hog bids and slaughter rates. Government data showed the average hog price on Monday morning in the most-watched Iowa/Minnesota market at $97.54 per hundredweight (cwt), $1.06 lower than on Friday. Monday morning's USDA mandatory wholesale pork price report, or cutout, calculated on a plant-delivered basis, was at $98.56 per cwt, down 32 cents from Friday. On Monday, packers processed 355,000 hogs, down 40,000 head from last week and 53,000 fewer than a year ago, according to USDA data. (Editing by Chris Reese)

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