U.S. live cattle futures settled mostly lower Friday on caution before the 2 p.m. ET release of the U.S. Department of Agriculture cattle-on-feed report.
While Chicago Mercantile Exchange (CME) live cattle drew support from higher cash cattle prices, selling in other contracts was tied to steep losses on Wall Street.
Most live cattle futures lost ground on the day, but gained almost two per cent for the week.
Spot October closed up 0.075 cent per pound, to 126.3 cents (all figures US$).
Most-actively traded December ended at 127.275 cents, 0.775 cent lower, and February finished 0.425 cent lower at 131 cents.
"The cash trade is supporting the October (futures) and the rest of them are looking down the road thinking this is probably is as good as it gets for a little while," said Pete Adams, a principle with PNM Trading.
"Stocks started swooning yesterday and kept going today. I think they’re in a bad mood right now," he said.
Cash cattle in the U.S. southern Plains sold for mostly $127 per hundredweight (cwt), $2 higher than last week, said feedlot sources. Live-basis cattle in Nebraska moved at $127, up $3 from a week ago.
"Tight supplies, hot beef demand and the board’s run up before today forced packers’ hand as their margins improved," a trader said.
HedgersEdge.com estimated beef packer margin for Friday at negative $9.90 per head, compared with negative $14.35 on Thursday and negative $35.45 for Oct. 12.
The wholesale price for choice beef Friday morning was down 0.01 cent/cwt to $196.80, but $5.35 higher than a week earlier, said USDA.
Lower feeder cattle
CME feeder cattle closed lower on Friday, but up two per cent for the week, on profit-taking while waiting for the government’s cattle report.
Spot October feeder cattle closed down 0.7 cent to 146.15 cents/lb. Most-actively traded November ended at 148.375 cents, down 0.750 cent.
The government will issue its monthly cold storage report, which will include total beef and pork inventories, at 2 p.m. CT on Monday.
Analysts on average expect the government’s cold storage data to show total September beef stocks at about 423.6 million lbs., compared with 429.8 million in August and 427.6 million during September 2011.
Hog futures finished higher on Friday in response to packers that paid more for hogs to assure themselves of inventories for early next week.
However, some expect packer demand to wane with reduced retail buying interest as product purchases for early November features subside.
Hogs at the CME were down three per cent for the week amid sporadic profit taking.
December closed 0.775 cent/lb. higher at 79.625 cents. February ended at 85.7 cents, up 0.375 cent.
The average hog price in the Iowa/Minnesota market Friday morning was up 65 cents/cwt from Thursday to $83.55 and $3.19 higher than a week earlier.
The analysts’ average forecast for pork inventories last month was 620.3 million lbs., compared with 580.8 million in August and 491.9 million a year earlier.
— Theopolis Waters writes for Reuters from Chicago.