U.S. livestock: CME live cattle gain slightly before USDA report

Chicago | Reuters — Chicago Mercantile Exchange live cattle futures nearby contracts posted modest gains on Friday as traders tweaked positions before the U.S. Department of Agriculture’s monthly Cattle on Feed report at 2 p.m. CT.

Most analysts, on average, believe fewer animals were put into feedlots in October than a year ago.

December live cattle closed up 0.1 cent/lb. to 108.325 cents, and February up 0.05 cent to 108.85 cents (all figures US$).

Investors also bought nearby months and simultaneously sold deferred contracts, stirred by the morning’s wholesale beef price uptick and this week’s higher-than-anticipated cash prices.

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This week, slaughter-ready, or cash, cattle in the U.S. Plains moved at $108 to $110/cwt, as much as $5 higher than last week, said feedlot sources.

Friday morning’s choice wholesale beef price jumped 98 cents/cwt from Thursday, to $183.29. Select cuts rose 36 cents, to $167.46, USDA said.

Beef demand could struggle in the foreseeable future given the huge amount of low-cost pork and chicken available, said A+A Trading broker Jim Clarkson.

Market participants are closely monitoring blizzard conditions in parts of the upper Plains that could disrupt the transportation of livestock to packing plants in the region.

CME feeder cattle finished mixed, with support from short-covering but pressured by soft back-month live cattle futures.

January feeders ended up 0.05 cent to 124.975 cents, and March down 0.250 cent to 120.775 cents.

Mostly weaker hog futures

CME lean hogs ended mostly weak after participants bought December futures and at the same time sold deferred contract months, said traders.

December closed 0.35 cent per pound higher at 47.8 cents. February ended down 0.05 cent/lb., to 54.175 cents, and April finished 0.175 cent lower at 61.125 cents.

“People bought December thinking cash prices are about to bottom out seasonally, and it’s the cheapest month on the board,” a trader said. “The cutout being up didn’t hurt.”

The morning wholesale pork price, or cutout, was 71 cents/cwt higher than on Thursday at $72.94, following the nearly $5 rebound in ham prices, USDA said.

Friday morning’s average cash hog price in the western Corn Belt fell 89 cents/cwt from Thursday to $40.74, USDA said.

Theopolis Waters reports on livestock markets for Reuters from Chicago.

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