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Feeder cattle also closed down sharply with November and January limit down. Lean hogs ended lower. And, pork bellies landed in bearish territory.
Uninspiring fundamental factors, and financial and equity market upheaval yanked cattle futures down soon after the opening bell. Fund selling surfaced after spot October and nearby December fell through key psychological price floors and previous lows.
Deferred cattle futures got into the act after Chicago Board of Trade corn made its way downward before eventually resting at limit bottoms by the end of the session. Distant cattle losses also mounted due to the lack of bids beneath the market and selling by local traders.
Meanwhile, front-end cattle selling accelerated after fed cattle on Thursday traded at lower prices than some of their early week counterparts.
Some cash-basis cattle on Thursday in Nebraska brought $94 per hundredweight compared with $98 on Wednesday. Kansas and Texas moved a few head at $96 to $97. Fed cattle last week sold for $96 to $99.
Furthermore, midday boxed prices reflected wholesale buyer disinterest in purchasing fresh beef at current prices.
The U.S. Department of Agriculture's midday Thursday boxed-beef wire showed choice cuts dropped $1.04 per hundredweight and select items fell $0.43.
Although more cattle are left in feedlots to be sold to packers, floor traders believe those animals may bring no more than $97 on Friday after futures broke hard Thursday.
Bullish and bearish traders are expected to square positions Friday, which may include short covering. And, prior to Thursday's tumble, October and December were already oversold technically, which might lure speculative longs on Friday.
Feeder cattle ended sharply lower, and November and January closed limit down, on live cattle losses, sell stops and spreading out of November into October.
Spot October live cattle settled 287 points lower at 95.70 cents a pound and fell to a 95.57-cent fresh contract low. December closed 240 points lower at 98.07 cents, its lowest level since Sept. 18, 2007.
October feeders closed 297 points lower at 100.57 cents and fell to a 100.55-cent fresh seasonal low. November ended 300 points lower at 100.60 cents.
Pork Complex
CME hogs ended lower on bearish fundamentals, active local selling and live cattle's dramatic pullback.
Pork futures sagged from the outset in response to Wednesday's pork cutout setback. There was also talk that packers may roll back near-term cash bids due to unprofitable margins.
Spot October eventually sank to a nine-month bottom after it tripped sell stops. Some midday cash hog prices that were down nearly $4 further also sent nervous bulls scrambling to get out of their positions.
Nearby November posted its second straight new contract low after it violated the Oct. 25, 2007, 63.00-cent psychological support mark.
Meanwhile, limit-down CBOT corn and live cattle's almost 300-point limit break leaned on distant hog futures throughout the session.
Flat to weak cash hog bids are seen for Friday as processors prepare for a weekend slaughter estimated around 150,000 head.
Packers who are hurting financially might curtail slaughter operations soon if their margins don't improve, a broker said. However, other packers will continue to kill at a brisk pace to satisfy prior meat purchase obligations and maintain plant operation efficiency, he added.
There is already sentiment that Thursday's futures retreat was overdone and possibly due for an upward adjustment Friday. October and December's oversold technical situations may also attract traders who may be fishing for a market bottom.
Pork bellies ended lower on lean hogs' fall, steady-to-weak midday fresh belly quotes at $82 to $85 and sell stops.
October hogs closed 177 points lower at 65.95 cents a pound, and December finished 157 points lower at 61.40.
February bellies closed down 32 points at 91.82 cents. March was unquoted. May closed 90 points lower at 92.60 cents.
-By Theopolis Waters, Dow Jones Newswires; 312-341-5778; theopolis.waters@dowjones.com
(END) Dow Jones Newswires
10-02-08 1644ET
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