CME live cattle rally 3rd straight session to 3-week high

Chicago Mercantile Exchange live cattle futures rose for a third consecutive session to their highest level in three weeks, fueled by Friday's strong cash prices and the U.S. government's bullish monthly Cattle-On-Feed report, traders said.

Friday's U.S. Department of Agriculture report showed 2.0 percent less cattle entered feedlots in September than a year ago, which resulted in a record low for that month.

Last week packers in the U.S. Plains paid mostly $99 to $100 for slaughter-ready, or cash, cattle that fetched $97 to $98 the week before.

"Friday's report was friendly for the short-term, but more importantly was the cash activity that occurred," said Archer Financial Services broker Dennis Smith.

He added that investors may be anticipating a potential gap, or hole, in supplies after some ranchers earlier sold their animals ahead to schedule as cattle prices declined amid abundant supplies of beef, pork and chicken.

Futures' advances accelerated after they rolled through technical resistance levels, which triggered buy stops and fund buying.

October live cattle closed 1.975 cents per pound higher at 103.125 cents, and most-actively traded December closed up 2.375 cents to 104.250 cents. Both contracts finished above their respective 40-day moving average of 102.57 and 103.46 cents.

Weaker corn prices, higher cash feeder cattle prices and more live cattle market advances lifted CME feeder cattle.

October feeders, which will expire on Thursday, ended up 0.500 cent per pound to 122.375 cents. Most-actively traded November finished 2.825 cents higher at 122.525 cents.

Hog futures up with cattle

CME lean hogs drew strength from Monday morning's steady cash prices and firmer wholesale pork values, said traders.

They said technical buying and the neighboring cattle market rally contributed to hog futures advances.

December lean hogs finished 1.350 cents per pound higher at 43.200 cents, and February 0.975 cent higher at 49.700 cents.

Both trading months settled above their respective 10-day moving average of 42.32 cents and 49.45 cents.

Midwest hog merchants believe fewer hogs will be available in early November after the prolonged downtrend in cash prices forced farmers to market their hogs sooner than they would have otherwise.

But the Archer broker, Smith, is not convinced processors will pay more for hogs, especially if wholesale pork values bow to already record numbers of hogs at lower prices, which enhanced packer profits.

"That would sort of defy gravity so to speak," he said.