U.S. cattle futures were higher on Monday as beef markets firmed and on signs the number of cattle offered to packers were waning while firm pork markets lifted hog futures, analysts and traders said.
Feeder cattle futures gained on short-covering from Friday's limit plunge after corn futures soared their limit in a bullish reaction to the U.S. government's report showing U.S. corn supplies below expectations.
Chicago Mercantile Exchange (CME) October live cattle were up 0.95 cent per pound at 123.025 cents/lb. December was up 1.425 at 126.25 (all figures US$).
"You had a packer in Texas bidding $121 today and although that is $2 below last week's market it's better than what was expected so I think that helped a little," said broker Troy Vetterkind of Vetterkind Brokerage.
Also "the showlist is smaller this week and although last week's beef market was softer it looks like it's trying to stabilize and firm up," Vetterkind said.
Traders said buying of cattle futures was not aggressive on Monday despite some signals the beef and cash cattle markets may be staging a recovery from the price slide late last week.
"Wholesale beef was down $3 Friday and I need to see proof beef is bottoming out and so far I see no proof of that," said Jack Salzsieder, analyst for K+S Financials.
The U.S. Department of Agriculture (USDA) boxed beef market report on Monday showed choice beef unchanged from Friday at $188.98 per hundredweight (cwt) and select up 12 cents at $177.97.
HedgersEdge reported packer margins for beef on Monday at a negative $52.15 per head compared with a negative $39.50 on Friday and a negative $31.10 a week ago.
Feeder cattle futures turned higher following the 3 cents per lb limit fall on Friday that was triggered by signals of higher costs to feed cattle from the limit up move in Chicago Board of Trade corn futures.
CBOT corn on Monday was showing signs of stabilizing which helped encourage some renewed demand for feeder cattle.
"The corn market is determining a lot of this and it remains to be seen what the harvest really brings, the size of the crop is still up for grabs," Salzsieder said.
CME October feeder cattle futures were up 0.875 cent at 144.675 cents/lb. November were up 1.275 at 145.625.
"Had plenty of time"
Lean hog futures posted advances on spreading or buying hog futures while selling cattle and deferred months gained on nearbys on bear spreading in anticipation of fewer hogs available for slaughter next year due to high feed costs.
CME October hogs were up 0.4 cent/lb. at 77.575 cents per lb. December was up 1.375 at 75.125.
"Cash hogs were higher (in some areas) and pork cutout was higher so that was supportive and also the hog and pig report showed numbers below average estimates," Vetterkind said.
Cash hog dealers on Monday said hogs were about $1/cwt lower in the Iowa and Minnesota markets due to ample supplies but fewer hogs had packers bidding steady to higher in Illinois, Indiana and Ohio.
"Cash hogs were up and that brought futures up," Salzsieder said.
The USDA on Friday reported the pork cutout at $80.49/cwt, up 21 cents from Thursday, and the highest since Sept. 4.
HedgersEdge reported the packer margin for pork on Monday at a positive $5.05/cwt, below the $5.85 margin on Friday and below the $8.35/cwt profit margin a week ago.
USDA's quarterly hog report on Friday showed the U.S. hog herd, the breeding herd and the market hog supply all were about unchanged from a year ago.
Some analysts expressed surprise that the record high corn prices did not lead to a big decline in the hog population because of the soaring feeding costs.
"It's amazing to me the hog herd is about the same size as a year ago with corn prices this high. They had plenty of time to cut the herd size with corn rallying in July and to a record in August but they didn't and that is kind of surprising," said Dennis Smith, a broker for Archer Financial.
-- Sam Nelson writes for Reuters from Chicago. Additional reporting for Reuters by Tim Dobbyn in Washington, D.C.