LIVESTOCK-Cattle rise on technical and bargain buying, hogs sink
By Karl Plume
CHICAGO, Dec 11 (Reuters) - U.S. live cattle futures advanced for a third straight session on Friday supported by technical and bargain buying and as strong packer margins were seen potentially keeping a floor under cash cattle prices.
Futures rose despite some demand concerns as soaring U.S. coronavirus rates triggered lockdowns that impact restaurant traffic, and as negotiations over a new pandemic relief bill stalled.
Chicago Mercantile Exchange (CME) February live cattle futures ended 1.400 cents higher at 113.250 cents per pound after breaking through technical chart resistance at its 100-day moving average. January feeder cattle jumped 2.125 cents to 139.725 cents per pound.
Cash cattle at Plains feedlot markets traded lower this week, but sales volumes were lighter than normal. Some traders and analysts believe cash prices could be steady to higher next week.
"We have not built the showlists up. We are running pretty tight on available cattle for the packer so next week he's probably going to have to come hunting for more cattle to fill his needs, especially with the New Year's holiday coming," said Mike Zuzolo, president of Global Commodity Analytics.
Retail beef demand was strong as prices have declined and grocers have been offering specials, he said.
The choice boxed beef cutout fell 71 cents to $213.88 per cwt on Friday, while choice cuts dropped $2.76 to $195.71 per cwt, according to the U.S. Department of Agriculture (USDA). Both were the lowest in a month.
Lean hog futures tumbled for a second straight day on technical selling and liquidation pressure.
"The technicals gave way in the hogs by taking out some support lines and short-term moving averages. That spurred some liquidation pressure," Zuzolo said.
February lean hogs fell 1.875 cents to 63.225 cents per pound, closing just above technical chart support at its 200-day moving average.
(Reporting by Karl Plume in Chicago Editing by Sonya Hepinstall)
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