Chicago | Reuters — Chicago Mercantile Exchange live cattle futures fell on Friday on profit-taking and positioning ahead of the U.S. Department of Agriculture’s Cattle on Feed report, released after the markets closed.
CME lean hog futures also ended lower, correcting after two days of positive movement, as optimism over rising hog slaughter rates strengthened the markets.
CME benchmark October live cattle ended 1.225 cents lower at 108.55 cents/lb. (all figures US$). October feeder cattle lost 1.1 cents to end at 145.275 cents/lb.
For the week, October live and feeder cattle traded 1.5 per cent lower.
“We’ve seen live cattle back off a little in the last couple days, but we’re really just pulling back in what has otherwise been a strong uptrend in the last couple weeks,” said Dan Hussey, senior market strategist at Zaner Group.
Strong wholesale beef prices underpinned the market. Choice cuts gained 61 cents at midday to $225.99/cwt, while select cuts climbed $2.92, to $209.23.
After the close, USDA’s monthly Cattle on Feed report showed July placements at 111 per cent of a year ago, above the average estimate in a Reuters analyst poll of 105.9 per cent. The number of cattle on feed as of Aug. 1, at 11.284 million head, was 102 per cent of the year prior, above the average trade estimate of 100.7 per cent.
“We could see a down move on Monday,” said Brian Hoops, senior market analyst at Midwest Market Solutions.
Meanwhile, lean hog futures pulled back, after gaining 2.3 per cent for the week as hog slaughter rates increased to pre-COVID 19 levels.
CME October lean hogs fell 0.925 cents to close at 54.25 cents/lb.
“These hogs were probably priced way too cheaply and needed some recovery,” Hoops said.
Daily hog slaughter reached 476,000 head, making the weekly total estimated slaughter 2.618 million head.
— Christopher Walljasper reports on agriculture and ag commodities for Reuters from Chicago.