U.S. livestock: Live cattle futures jump on fund-driven buying

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Chicago | Reuters – U.S. live cattle futures rose more than 1 percent on Wednesday to fresh multi-month highs and feeder cattle futures surged 2 percent on what traders said was a combination of fund-driven buying and signs of strength in the cash cattle market.

Chicago Mercantile Exchange (CME) December live cattle ended 1.475 cents higher at 118.300 cents per pound after reaching 118.600 cents, the contract’s highest since April 25.

CME most-active January feeder cattle futures settled up 3.200 cents at 144.800 cents per pound after reaching 144.975, its highest since May 21.

The January feeder cattle contract triggered buy-stops as it pushed through chart resistance at 143 cents.

“It felt like they were squeezing out the weak shorts. Tomorrow is the final trading day of October, and the funds close out their books on a monthly basis. So to me, this looks like end-month position squaring,” said Jeff French, analyst with Top Third Ag Marketing in Chicago.

Cash cattle traded as high as $112 per cwt, according to the U.S. Department of Agriculture, up from about $110 last week.

“That left a lot of traders believing it would be $114 by the end of the week, and that seemed to fuel the buying (in futures),” said Dennis Smith, a broker for Archer Financial Services in Chicago.

“It’s my opinion we are seeing the funds pile in and get long here,” Smith added.

CME lean hog futures closed higher but trailed the advances in the cattle markets. CME December hogs ended the day up 1.450 cents at 65.775 cents per pound.



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