Fund Buying Rallies CME Live, Feeder Cattle Futures
Chicago Mercantile Exchange live cattle contracts on Tuesday reversed Monday's losses, supported by short-covering and technical buying, said traders.
Funds that follow the Standard & Poor's Goldman Sachs Commodity Index periodically sold, or "rolled", August futures and simultaneously bought October on the second of five days of the Goldman Roll process.
August ended 1.050 cents per pound higher at 114.875 cents. October closed 1.400 cents higher at 114.825 cents, and above the 20-day moving average of 114.013 cents.
Algorithm-type traders were behind Tuesday's market gains in the absence of fundamental news, said Archer Financial Services broker Dennis Smith.
Fundamental investors are tracking seasonally slumping wholesale beef values and adequate cattle supplies that market bears believe could weigh on some cash prices later this week.
Contrarians contend that fewer cattle for sale than last week in parts of the U.S. Plains and still impressive packer profits might help underpin cash returns.
A week ago most of the slaughter-ready, or cash, cattle in the U.S. Plains traded from $118 to $119 per cwt.
Market participants await Wednesday's Fed Cattle Exchange sale of 2,655 animals. Cattle there last week, on average, brought $117.75 per cwt.
Fund buying and live cattle futures turnaround boosted CME feeder cattle contracts.
August feeders ended 2.575 cents per pound higher at 147.250 cents.
Firmer Front-month Hog Futures
Short-covering and CME lean hogs' discounts to the exchange's hog index for July 7 at 92.46 cents supported nearby futures contracts, said traders.
July, which will expire on July 17, ended up 0.675 cent per pound to 92.150 cents. Most actively-traded August finished up 0.250 cent to 82.250 cents.
Investors sold deferred months and bought nearby contracts given the prospect of increased supplies during the second half of the year.
Cash hog prices and wholesale pork demand may peak around mid-July as more hogs come to market and high-heat scales back outdoor cook outs, said traders and analysts.
