U.S. livestock: Cattle jump in technical rebound as corn extends losses

Chicago | Reuters — U.S. live cattle rose sharply on Thursday, extending gains to the third session in a row on technical buying and as falling corn prices reduced feed costs for fattening animals, traders and analysts said.

Feeder cattle climbed to a 1-1/2 week high as corn slid to a six-week low while big weekly U.S. beef exports prompted optimism of better meat demand overseas.

Lean hogs were lower, extending steep losses from earlier this week on profit-taking and technical selling.

The gyrations in cattle and hogs came ahead of several major U.S. Department of Agriculture livestock reports due after the close of trading on Friday, including monthly Cattle on Feed and quarterly Hogs and Pigs data.

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“It’s just a technical bounce,” said Archer Financial Services broker Dennis Smith.

CME August live cattle settled 2.225 cents higher at 113.85 cents/lb., notching their biggest gains in two weeks (all figures US$).

CME August feeder cattle gained 2.2 cents to 142.375 cents/lb. Live cattle rebounded from a four-year low from Monday and feeder cattle a three-year low.

USDA before the open of futures trading said 16,191 tonnes of U.S. beef were sold for export last week, the largest sales in five weeks.

“The export business was really good and maybe there’s a hope that will shore up beef demand,” Smith added.

CME August lean hogs futures finished down 0.4, at 85.45 cents/lb. The contract pared earlier declines but still fell to the lowest levels since June 3.

USDA data released late on Thursday showed lower wholesale prices both for beef and pork as many retailers have wrapped up buying ahead of the U.S. Independence Day holiday on July 4, when some consumers celebrate by grilling meat outdoors.

Prices for one pork cut, ribs, fell $5, to $146.89 while the cutout measuring standard cuts declined 36 cents to $88.91, USDA data showed.

“You’re getting late for shipping product for the Fourth of July,” said livestock analyst John Ginzel of The Linn Group. “You’re in a post-holiday demand period.”

Ginzel added that speculative investors were exiting positions in hogs as prices retreated from recent 1-1/2 year highs. “They’ve come charging into the market, and they’ve overdone it.”

— Michael Hirtzer reports on agriculture and ag commodity markets for Reuters from Chicago.

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