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Feeder cattle ended down sharply and most contracts tumbled to new monthly lows. Lean hogs posted an uneven finish. And, pork bellies closed mixed.
Beef futures spiked at first on short covering and spot December and nearby February's oversold Relative Strength Index conditions. Furthermore, continued solid wholesale beef demand contributed to front-end cattle advances and fed into no-worse-than-steady cash cattle price notions.
The U.S. Department of Agriculture's midday Tuesday boxed-beef data showed choice cuts up $0.18 per hundredweight and select items gained $1.01.
Cash basis fed cattle last week sold for $92 to mainly $93 per hundredweight. Packer bids so far this week were unreported. Asking prices were sketchy at $95.
However, live cattle futures later took back initial gains as the U.S. equities sector soured. December and February set off sell stops after both contracts slipped beneath their respective Monday lows.
Meanwhile, Chicago Board of Trade corn losses pressured most rear cattle contracts throughout the session.
Live cattle's pattern of keeping pace with the U.S. stock market is not expected to change on Wednesday.
A few traders on Wednesday may also adjust positions before Friday's USDA monthly cattle-on-feed report. Analysts' early estimates suggest placements and marketings declined during October.
And fundamental-oriented players will scrutinize wholesale beef buying activity as retailers stock meat counters in preparation for Thanksgiving holiday features.
Feeder cattle ended sharply lower, and most contracts tumbled to new monthly lows, on spillover live cattle liquidation, sell stops and spreaders who sold nearby January and bought spot November that will expire Nov. 20.
CME Group announced Tuesday that options on feeder cattle futures will be listed on its Globex trading platform beginning Nov. 24.
December live cattle closed 115 points lower at 87.15 cents a pound and drifted to an 86.92-cent fresh monthly low. February finished 142 points lower at 87.60 cents. The contract made a new seasonal low of 87.40 cents.
November feeder cattle ended down 27 points at 95.75 cents. January closed 265 points lower at 91.25 cents and sank to a 91.10-cent fresh seasonal bottom.
Pork Complex
Lean hogs ended uneven during a volatile day of trading that featured short covering versus fundamental pressure and spreading out of back months into forward contracts.
Most front-month hogs rose at first, spurred by December's and February's slightly oversold chart situations and short covering. Pockets of steady-to-higher cash hog prices at times inspired spot December bulls.
Also, spot December's 10-day moving average provided underlying support. And nearby February buying interest surfaced after the contract overcame its 10-day moving average obstacle.
Nevertheless, depressed midday direct cash hog quotes scared off other would-be longs and generated selling into front-month upticks. Inconsistent outside market action kept prospective bulls on the defensive.
And, while a few distant-month hog speculative buyers were undaunted by CBOT corn that toiled in bearish territory for most of the morning, others opted to observe the day's proceedings from the sidelines.
Talk of generally steady cash hog prices for Wednesday offered little direction for bullish and bearish hog traders.
Packers need supplies to fill this week slaughter schedule, but they may be less aggressive about chasing hogs given skimpy profit margins and the approaching Thanksgiving holiday.
The U.S. government's Iowa/Southern Minnesota weekly average hog weight data will be available early Wednesday morning.
And traders on Wednesday are expected to spend another day monitoring outside market progress.
Pork bellies finished mixed on cash belly caution, technical resistance and light March speculative buying.
CME's weekly belly storage data will be released on Tuesday after 5 p.m. EST.
December hogs closed up 15 points at 55.45 cents a pound, and February also finished up 15 points at 62.20 cents.
February pork bellies closed down 20 points at 84.50 cents, and March ended up 35 points at 83.05 cents.
-By Theopolis Waters, Dow Jones Newswires; 312-341-5778; theopolis.waters@dowjones.com
(END) Dow Jones Newswires
11-18-08 1544ET
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