Chicago | Reuters — U.S. live cattle futures climbed to a roughly two-week high on Friday, boosted by chart-based buying ahead of a government supply report that was released after the close, traders said.
Chicago Mercantile Exchange live cattle extended steep gains from the previous session, with the two-day percentage rise of 4.9 per cent the largest since December. CME December live cattle finished 1.75 cents higher at 101.875 cents/lb., in a rebound from last week’s six-year lows.
“Live cattle futures have clearly put in another short-term low and may have put in a more significant bottom last week, based on the technical action,” brokerage Brock Associates said in a note to clients.
The higher prices came ahead of the U.S. Department of Agriculture’s monthly Cattle on Feed report, which was released after the close of trading and showed fewer-than-expected cattle placed on feed to fatten for slaughter.
Cattle placements during September of 1.905 million head were 98 per cent of last year, down sharply from an average of analysts polled by Reuters of 103.6 per cent and the lowest September total in USDA data going back to 1996.
USDA separately said 520.72 million lbs. of beef and 642.04 million lbs. of pork were in cold storage, above analyst estimates of 494.4 million lbs. beef and 628.8 million lbs. pork.
Rich Nelson, analyst at Allendale Inc., said USDA’s cattle report was bullish but potential support could be offset by the cold storage data. However, the cold storage report generally is seen as less of a market mover, as slaughter data is seen as a better indication of current market dynamics than data of meat in storage.
“I would temper my enthusiasm because the cold storage had a little more beef than expected,” Nelson said, adding that live cattle futures should add to gains when trade resumes on Monday.
Feeder cattle and lean hog futures also were mostly higher, rallying from recent multiyear lows on technical buying.
CME November feeder cattle finished 0.85 cent higher at 119.7 cents/lb. and CME December lean hogs were up 0.75 cent, to 41.85 cents/lb.
USDA said pork packers expected to slaughter 317,000 hogs on Saturday, which would bring the week’s total hog slaughter to a record-large 2.514 million head.
— Michael Hirtzer reports on ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Theopolis Waters.