CHICAGO (Dow Jones)--Chicago Mercantile Exchange live cattle settled lower Tuesday on U.S. equities sector liquidation, spreading out of deferred months into forward contracts and corn prices' slide.
Feeder cattle also registered sizable losses, most pork belly contracts closed down slightly and lean hogs finished flat to weaker.
Beef futures slumped initially on U.S. financial markets that loitered in bearish territory during the morning. Back-month cattle longs snared profits after Monday's runup.
And spot December and nearby February selling accelerated after both contracts started the session beneath 10-day moving average support. December and February also triggered sell stops after both months ultimately fell through their respective 20-day moving average support floors.
Additionally, distant cattle option buyers were on the defensive throughout the session after Chicago Board of Trade corn traded negatively overnight and during the outcry session.
However, spot December live cattle were spared the brunt of the day's losses due to bullish cash cattle price speculation fueled by still vigorous wholesale beef sales.
The U.S. Department of Agriculture's midday Tuesday boxed-beef item showed another $2.71 per hundredweight choice cut jump. Select items gained an additional $0.83.
Spotty cash-basis fed cattle bids surfaced at $92 per hundredweight in the shadow of $96 to $97 asking prices. Cash cattle last week mostly sold for $94.
Some "Goldman roll" business was conducted Tuesday despite December/February forward positioning driven by positive fundamental indicators.
The Goldman roll involves funds moving some of their spot December long positions primarily into nearby February. The process, which began Friday and will run through Thursday, is tied to the Standard & Poor's Goldman Sachs Commodity Index. Traders may intensify their Goldman roll trades on Wednesday, the eve of the last official day for the current roll period.
Cattle traders who took the day off Tuesday in observance of the Veterans Day holiday, which resulted in lighter-than-usual volume, are expected back on the trading floor Wednesday.
And, cattle market participants will watch subsequent U.S. financial market action heading into Wednesday after Tuesday's setback.
Feeder cattle ended lower as well on live cattle's withdrawal, directionless feeder cattle cash prices and futures' premium to CME's feeder cattle index.
Spot November's and nearby January's 10-day moving average technical resistance kept a lid on those contracts. Spreaders sold January and bought November.
And, January set off sell stops after it slipped beneath 20-day moving average support.
December live cattle closed 105 points lower at 91.60 cents a pound, and February finished 135 points lower at 92.80 cents.
November feeder cattle ended 80 points lower at 98.20 cents, and January closed 167 points lower at 97.20 cents.
Pork Complex
CME lean hogs ended flat to weaker on spreaders who sold distant hog months and bought December and February, the depressed U.S. stock market and sell stops.
Furthermore, CBOT corn's erosion and profit-taking deflated deep hog contracts.
Pork futures began the morning on a sour note struck by the financial sector's inability to shrug off recent losses. Profiteers raided deferred hog months after Monday's advances and CBOT corn declines.
Spot December and nearby February also at times encountered 10-day moving average technical resistance. And, mainly steady-to-lower cash hog returns sidelined most would-be bulls.
More cash hog weakness is expected for Wednesday.
By the same token, some bullish hog traders viewed spotty cash hog price firmness Tuesday as a sign that packers might ease price pressure soon if pork cutout values hold up.
USDA's Iowa/Southern Minnesota weekly average hog weight item will be available early Wednesday morning.
And, some Goldman roll activity was reported Tuesday, with more expected Wednesday.
Pork bellies finished mostly weak on spillover selling, lean hog liquidation and positioning ahead of CME's weekly belly storage report Tuesday, due after 5 p.m. EST.
December hogs closed down 2 points at 54.97 cents a pound, and February finished down 20 points at 62.55 cents.
February pork bellies closed up 47 points at 84.67 cents, and March ended down 10 points at 83.40 cents.
-By Theopolis Waters, Dow Jones Newswires; 312-341-5778; theopolis.waters@dowjones.com