CHICAGO, Nov 8 (Reuters) - Chicago Mercantile Exchange (CME) cattle futures saw a choppy day of trading on Wednesday, before rallying later in the session on short-covering and technical buying, traders said.
December live cattle futures dipped below its 200-day moving average of $177.50 before bouncing up. January 2024 feeder cattle futures also fell to the lowest since May 8, before rebounding.
And some back-month cattle futures contracts, though thinly-traded, dipped to new contract lows on the day.
But the story of the day for many traders were cattle's up-front months, said Don Roose, president of U.S. Commodities in West Des Moines, Iowa.
The cash cattle market has been slower than expected this week, with low bids trickling out in the U.S. Midwest markets but a dearth of offers as packers are limiting their buying as margins have fallen sharply, traders said.
"The bottom line is the funds were really long, and there's been a lot of liquidation," Roose said. "And when you look at futures to cash, the futures are simply too cheap compared to the cash prices right now."
Packers slaughtered an estimated 124,000 cattle on Wednesday, higher than a week ago but short of the 128,000 head processed the same time last year, according to U.S. Department of Agriculture data.
In CME's lean hog market, December futures settled 1.400 cents lower at 71.500 cents per pound on technical selling and profit taking, traders said.
December live cattle futures settled 0.625 cent higher at 179.400 cents per pound at the Chicago Mercantile Exchange (CME). Earlier in the session, the contract dipped to its lowest price since June 21 at 176.625 cents.
CME January feeder cattle futures settled up 1.950 cents to end at 232.775 per pound and touched the lowest price since May 8 at 227.425 cents. (Reporting by P.J. Huffstutter; Editing by Krishna Chandra Eluri)
