October 7, 2010

 

CME cattle futures end lower on lack of bullish cash market

 

 

Pit-traded CME live cattle futures Wednesday ended lower as cash market confidence faded, and bullish news from other markets was lacking.

 

In the other markets, feeder cattle and lean hogs were mixed but mostly lower.

 

Many cattle traders spent much of the session just waiting for something to develop in currency, financial or other commodity markets that would be a significant influence on live cattle or feeder cattle futures. News that might be considered bullish did not appear, and the market tended to work lower because of ideas cash prices this week could be lower.

 

Beef markets have been weak since mid-September, but further declines could be coming, traders said. Support may not show up until closer to the holiday season, when fresh rib roast demand picks up.

 

Feeder cattle prices ended mixed to mostly lower. Early strength based on hopes that a weaker US dollar would spur some demand for live cattle futures faded as live cattle markets declined. Corn prices also were not a factor in feeder cattle futures through the day, traders said.

 

Live cattle markets triggered some pre-arranged sell orders when the December contract dropped below Monday's low, a broker said. Prices then set nearly two-month lows before the sell orders ran out.

 

The December contract closed a little below key support points and at the lowest level since August 3.

 

Cash markets saw little action during the day, but reported prices from the Plains were down US$1 to US$2 per hundredweight from last week.

 

October live cattle settled 0.70 cent a pound, or 0.73%, lower, at 94.85 cents a pound. December was 0.60 cent, or 0.61%, lower, at 97.07 cents. October feeder cattle were down 0.35 cent, or 0.32%, at 109.20 cents, and November was off 0.25 cent, or 0.23%, at 109.25 cents.

 

Pit-traded lean hog futures traded mostly lower through the session but at times some contracts did muster enough strength to move into higher territory. They closed narrowly mixed but decliners outnumbered the gainers two to one.

 

Brokers said the market fell initially on the steep break in wholesale pork prices reported Tuesday afternoon. The early declines, however, were limited by technical support as prices in most-active December tested but failed to break Monday's 7 1/2-week low. October hogs did slip to a five-week low and closed at the lowest level since September 1.

 

May through July finished the day with slight gains, extending their advances from Tuesday.

 

Spot-month October closed down 0.07 cent at 75.27 cents. Most-active December finished 0.05 cent lower, at 72.20 cents.