Cattle Futures Weaken on Technicals After 2-week High
U.S. live cattle futures eased slightly in a technical selloff on Thursday after prices earlier notched a two-week high, traders said.
Lean hog futures also were mostly lower, sagging under pressure from abundant supplies and declines in cash markets, while feeder cattle were modestly higher at the Chicago Mercantile Exchange.
There was little fresh news in any of the markets and dealers were waiting for trades to develop in U.S. Plains cash cattle markets.
"Both live and feeder cattle are testing key resistance levels. When the market has been coming down like it has in a longer-term trend, you're going to fail when you test that (resistance level) for the first time," said Zaner Group analyst Ted Seifried.
CME October live cattle settled 0.625 cent lower at 106.925 cents per pound, reversing from their session peak of 108.900 cents, the highest levels since Aug. 28.
The contract has clawed back from multi-month lows reached on Aug. 31 but gains have been limited by sufficient cattle supplies and declines in beef prices that kept a lid on meat packer demand.
Some traders expected Plains cash cattle sales to develop near last week's deals of $105 per cwt, and that sentiment has buoyed futures so far this week.
Choice-grade wholesale beef prices were up 60 cents to $191.00 per cwt while select cuts eased $1.97 to $186.72, the U.S. Department of Agriculture said after the close of trading.
CME October feeder cattle finished 0.475 cent higher at 149.625 cents per pound. The contract earlier hit 150.775 cents per pound, highest since Aug. 3.
Feeder cattle were driven higher in part by stronger demand for young cattle for grazing amid good pasture conditions in the southern Plains, traders said.
CME October lean hogs were up 0.125 cent to 59.575 cents per pound, holding above Wednesday's roughly 11-month low. The December contract declined 0.325 cent to 56.775 cents.
Cash hog prices extended losses, easing 51 cents to $53.79 cents in the top Iowa and Minnesota market, according to USDA. Wholesale pork prices also declined, dropping $1.10 to $79.20 per cwt.
"Maybe we get some stability from oversold (conditions) in hogs, but I'm still worried that large supplies could take us another leg lower," Seifried said.
