US cattle falls on technical selling, demand fears

Tue Apr 3, 2012 8:30pm GMT
 

* Cattle pressured by fund selling, lower cash market
    * Lean hog futures follow cattle lower
    * Feeders pressured by higher corn

    By Meredith Davis	
    CHICAGO, April 3 (Reuters) - U.S. cattle futures fell to
their lowest level in 3-1/2 months on Tuesday amid selling by
commodity funds and a sharp increase in the dollar, which could
dampen export demand.	
    Concerns over beef demand kept hanging over the market as
the controversy over filler beef that critics call 'pink slime'
claimed another victim. Ground beef processor AFA Foods filed
for bankruptcy protection on Monday. 	
    "Today there was technical action. Funds were dumping
commodities," said Dan Norcini, an independent livestock trader.	
    Live cattle futures traded as low as 119.400 cents
per lb on Tuesday, the lowest since Dec. 19, 2011.	
    Futures were weighed by declining prices for cattle in cash
markets, with trading on Tuesday at $122 per cwt in Texas and
Kansas -- down $2 to $3 from last week and more than 6 percent
lower from a record high $130 early last month.	
    Cash cattle traded at $124 to $125 per cwt last week.	
    The estimated choice-grade wholesale beef price was up 47
cents to $184.57 on Tuesday morning, according to U.S.
Agriculture Department data, however load count was light at 58
loads.	
    The uproar over "pink slime" kept weighing on the market.	
    "It has put a dent in demand. It is bullish for live cattle
over the long-term, but short-term it is certainly negative,"
Norcini said. 	
    April live cattle futures on the Chicago Mercantile
Exchange fell 1.050 cent, or 0.87 percent, to settle at 119.800
cents per lb. June cattle fell 0.750 cent, or 0.64
percent, to 116.050 cents.	
    Rising corn prices pressured feeder cattle futures. CME
April feeder cattle fell 0.275 cent, or 0.18 percent, to
149.250 cents per lb. 	
    	
    HOGS FOLLOW CATTLE LOWER 	
    Lean hog futures were also pressured by technical selling in
the livestock sector trimming gains from a Monday's rally. 	
    "Hogs want to find a bottom, but they keep getting pulled
lower by cattle," Norcini said. 	
    Pork packer margins remain in the red at a negative $4.40
per head on Tuesday, but improved from losses a week ago at
negative $10.15 per head.	
    Actively traded April hogs ended down 0.700 cents,
or 0.83 percent, at 84.025 cents a lb and June hogs fell
0.525 cent, or 0.57 percent, to 91.650 cents.	
	
 (Reporting by Meredith Davis; Editing by David Gregorio)

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