LIVESTOCK-Live cattle futures drift lower on technical selling
By Julie Ingwersen
CHICAGO, Jan 8 (Reuters) - U.S. cattle futures closed lower on Friday on light technical selling, with the spot February contract pressured as speculators rolled long positions into forward months, traders said.
Chicago Mercantile Exchange (CME) February live cattle futures settled down 0.500 cent at 114.475 cents per pound.
Friday was the first day of the five-session "Goldman roll" period during which some index funds roll February futures positions forward into April contracts.
"That kept February hogs and cattle under wraps," said Dennis Smith, a broker at Archer Financial Services.
CME March feeder cattle ended down 0.750 cent at 136.825 cents per pound but stayed inside of Thursday's trading range. Traders await direction from key crop reports due Jan. 12 from the U.S. Department of Agriculture. Most analysts surveyed by Reuters expect the USDA to lower its estimates of U.S. corn production and 2020/21 ending stocks.
Rising corn prices hung over the market, signaling higher feed costs. Benchmark Chicago Board of Trade corn traded above $5 a bushel this week for the first time since 2014 before paring gains.
Wholesale beef prices firmed slightly. The choice boxed beef cutout rose $0.99 to $206.84 per cwt, according to the U.S. Agriculture Department. Select cuts rose by $0.10 to $196.69 per cwt.
CME lean hog futures closed mostly lower, with the February contract down 0.425 cent at 68.700 cents per pound.
But back months in both the hog and cattle markets drew support from speculators steering investments into the commodity sector amid expectations for further government stimulus measures to prop up an economy battered by the coronavirus pandemic.
"We are moving into an inflationary environment," Smith said, adding that the incoming Biden administration "is going to open up the money spigot, big time, and that is bullish commodities; it's bullish hogs and cattle."
The U.S. pork carcass cutout value rose $1.18 on Friday afternoon to $81.00 per cwt.
Also on Friday, the USDA reported U.S. November pork exports at 632.7 million pounds, up from 623.5 million a year earlier. November beef and veal exports totaled nearly 277 million pounds, up from 244.7 million pounds a year ago.
(Reporting by Julie Ingwersen; Editing by Daniel Wallis)
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