By Theopolis Waters
CHICAGO, Oct 18 (Reuters) - Chicago Mercantile Exchange live
cattle futures on Friday gained in quiet trading, partly
supported by this week's higher cash prices, traders said.
And investors bought CME live cattle with the view that
Thursday's technical-related market selloff was overdone.
'The market was extremely quiet with people not knowing
which direction to go after yesterday's wild downward reversal,'
said R.J. O'Brien floor manager Jim Brooks.
This week, cash-basis cattle traded at mostly $129 to $130
per hundredweight (cwt), up $1 to $2 higher from last week. It
flirted with the $130 all-time high for the week ended March 2,
2012, feedlot sources said.
Less available cattle and recently improved wholesale beef
prices convinced packers to raise bids for supplies. Those
higher cash prices pressured packer margins.
Friday afternoon's average wholesale choice beef price, or
cutout, was at $196.29 per cwt, up 26 cents from Thursday.
Select cuts fell $1.74 to $179.98.
Estimated margins for U.S. beef packers on Friday were a
negative $44.30 per head, compared with a negative $46.70 on
Thursday and a negative $37.40 a week ago, according to
'I don't think futures will get much higher until they find
out if packers can sell the meat,' K&S Financials analyst Jack
The U.S. Department of Agriculture released its weekly beef
and pork export results on Friday at 11 a.m. CDT (1600 GMT).
That data showed U.S. beef sales last week at 12,800
tonnes, mostly to Japan. It compares with 9,300 tonnes on Sept.
26, the last time USDA issued the report.
USDA on Thursday said it will delay its monthly
cattle-on-feed report to Oct. 31 from Friday, Oct. 18.
Most analysts polled by Reuters for the cattle report said
feedlot placements last month likely increased 1.6 percent from
a year earlier as corn costs declined.
Live cattle October closed 0.725 cent per lb higher
at 129.875 cents. December finished at 132.025 cents, up
0.250 cent and in line with the 20-day moving average of 132.03
CME feeder cattle ended mixed, with the higher live cattle
market offering support while pressured by profit taking.
October closed at 166.075 cents per lb, 0.225 cent
higher while November ended down 0.050 cent to 166.850
HOGS DROP ON CASH JITTERS
Investors sold CME hogs in response to lower cash prices,
The government Friday afternoon showed the average price of
hogs in the most-watched Iowa/Minnesota market at $90.83 per
cwt, down 57 cents from Thursday.
More hogs are available as cool fall temperatures and
newly-harvested corn allows hogs to quickly put on weight while
pumping more pork into the retail pipeline.
That was not the case last summer when drought pushed feed
costs to all-time highs, which forced producers to grow hogs to
lighter weight or downsize their herds.
USDA data showed the wholesale pork price, or cutout,
Friday afternoon at $94.30 per cwt, $1.58 lower than on
The USDA on Friday reported U.S. pork export sales last
week at 21,800 tonnes, mainly to Mexico, compared with 9,500
tonnes the last time the data was available on Sept. 26.
Friday's pork export outcome was the second highest since
USDA began issuing the data on April. 4 when it was 48,400
'It's hard for me to get excited about that pork export
number when I've not seen it for two weeks,' a trader said
regarding the lapse in USDA information due to the government
December hogs closed 0.500 cent per lb lower at
87.950 cents and February finished at 90.050 cents, down
(Editing by Andrew Hay)
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