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LIVESTOCK-U.S. live cattle futures drop on profit taking
January 29, 2013 / 9:14 PM / 5 years ago

LIVESTOCK-U.S. live cattle futures drop on profit taking

* Traders cautious ahead of cash cattle sales
    * Feeders drop with lower live cattle futures
    * Most hog futures rise on supply outlook

    By Theopolis Waters
    CHICAGO, Jan 29 (Reuters) - Chicago Mercantile Exchange live
cattle futures Tuesday slipped on profit taking following their
steep climb on Monday, said analysts and traders.
    Futures on Monday jumped more than 2 percent driven by last
Friday's bullish government monthly cattle report. Investors
also embraced plans by Japan to relax U.S. beef import rules
effective Feb. 1.
    CME spot February live cattle closed at 128.275
cents per lb, 0.675 cent lower. Most-actively traded April
 ended down 0.425 cent to 132.975 cents.
    Investors also traded cautiously while waiting for cattle in
the cash market to change hands.
    Bearish traders cite futures' premium to last week's $122 to
$124 per cwt cash sales and reluctance by supermarkets to
purchase beef at higher prices.
    Market bulls point to fewer cattle available for sale this
week and improving packer margins as supportive for cash prices.
    The price for wholesale choice beef on Tuesday morning was
$187.03 per cwt, down 58 cents from Monday; and select cuts
dropped 43 cents to $181.99, according to the U.S. Department of
Agriculture.
    HedgersEdge.com data showed the average beef packer margin
for Tuesday at a negative $23.05 per head, compared with a
negative $33.55 on Monday and a negative $55.25 on Jan. 22.
    Futures investors are monitoring forecasts for the return of
wintry weather to the U.S. Plains later this week that could
slow the movement of livestock to processors, thereby
underpinning cash prices.
    CME feeder cattle pulled back on profit taking and the
weaker live cattle market.
    Spot January ended unchanged at 145.800 cents.
Most-actively traded March finished at 148.825 cents,
1.075 cents lower and April settled 0.925 cents lower at
152.375 cents.
   
    MOST HOGS GAIN ON SUPPLY OUTLOOK
    Lower cash hog prices pressured February futures while
expectations for tight supplies lifted remaining contracts, said
analysts and traders.
    Spot February hogs settled down 0.075 cent per lb at
87.100 cents. Most-active April ended at 89.625 cents,
0.575 cent higher and June finished up 0.525 cent to
98.175.
    Record warmth in the parts of Plains allowed hogs to move to
market after they had backed up on farms during frigid
temperatures last week, which pressured near-term cash prices.
    Packers also lowered cash hog bids to realign their margins.
    The average price for hogs in the most-watched
Iowa/Minnesota market on Tuesday was $84.14 per cwt, down $1.60
from Monday, USDA said.
    The average pork packer margin for Tuesday was a negative
$4.80 per head, compared with a negative $5.30 on Monday and a
negative $9.05 on Jan. 22, according to HedgersEdge.com.
    But, temperatures are expected to plunge by Thursday in the
north-central and western Midwest which could reduce the flow of
hogs to market and underpin cash values.
    Producers will avoid transporting hogs if temperatures fall
in the single digits that could result in animal death loss,
said Country Hedging analyst Tregg Cronin.

 (Editing by Diane Craft)

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