LIVESTOCK-U.S. nearby cattle futures end lower on profit-taking

By Julie Ingwersen

CHICAGO, Oct 1 (Reuters) - U.S. live cattle futures closed mixed on Thursday with nearby contracts drifting lower on profit-taking a day after the benchmark December contract touched a six-week high, analysts said.

Commodity funds hold a net long position in Chicago Mercantile Exchange (CME) live cattle futures, leaving the market vulnerable to bouts of long liquidation.

Yet brisk demand for beef underpinned values, and traders also said that market-ready cattle traded lightly in the cash market at $107 per cwt, up $1 to $2 from last week.

Packer margins for cattle were hovering around $300 per head, according to Denver-based livestock marketing advisory service, encouraging meat packers to spend more to buy cattle from feedlots.

"The margins are there to support them paying, being able to make money while they can," said Matthew Wiegand, a broker at FuturesOne.

Chicago Mercantile Exchange October live cattle settled down 0.025 cent at 108.525 cents per pound and most-active December ended down 0.525 cent at 111.825 cents, a day after reaching its highest since Aug. 20.

CME November feeder cattle settled down 0.800 cent at 141.250 cents per pound.

Rising prices for corn, the main cattle feed grain, pressured CME feeder cattle futures for a second day, after the U.S. Department of Agriculture (USDA) on Wednesday reported tighter-than-expected quarterly U.S. corn stocks.

CME lean hog futures ended mixed, with the nearby October contract gaining against back months on spreads, supported by strength in the CME's lean hog index.

"It looks like (packers) are struggling a little bit to get pigs," Wiegand said, adding that wholesale pork prices rose on Thursday, according to the USDA.

Expectations that hog supplies would ease later this year pressured the most-active December contract.

"Fourth-quarter production is normally the highest of the year," said Alan Brugler of Brugler Marketing & Management.

CME October lean hog futures settled up 1.350 cents at 74.150 cents per pound, while most-active December hogs ended down 0.250 cent at 62.850 cents.

The USDA reported export sales of U.S. pork in the week ended Sept. 24 at 39,500 tonnes, including sales of 6,500 tonnes to China. Beef export sales totaled 24,700 tonnes, including sales of 4,300 tonnes to China. (Reporting by Julie Ingwersen; editing by Richard Pullin)

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