Chicago | Reuters — U.S. live and feeder cattle futures closed lower on Friday after disappointing cold storage data the previous day and ahead of the U.S. Department of Agriculture’s cattle on feed report in the afternoon.
Lean hog futures also dropped, as backups continue at slaughter facilities, traders said.
The nearby CME live cattle futures contract lost 1.1 cents to close at 97.7 cents/lb., while August live cattle ended 0.9 cent lower at 97.325 cents/lb. (all figures US$).
Feeder cattle contracts also weakened, with the August contract slipping 0.075 cent to 128.8 cents/lb.
June lean hogs lost 0.575 cents to 58.775 cents/lb., while the July contract sank 1.275 cents to 55.9 cents/lb.
USDA showed a slight drop in cold storage meat supplies on Thursday, with beef dropping two per cent from April, but still 14 per cent higher than last year. Frozen pork was down just one per cent from last year.
“There was no big draw down in stocks, which was a little counter to what the trade was expecting,” said Rich Nelson, chief strategist at Allendale Inc.
In its monthly report, USDA said May 1 cattle on feed dropped to 95 per cent from a year ago, while April placements were 78 per cent, beating trade estimates of 77.4 per cent.
Nelson said Friday’s report showed the backup in cattle isn’t going away anytime soon.
“We’re going to hold that backlog in place, all the way to September, when these low supplies start to drop off,” said Nelson. “September through December, we’ll have some relatively low supplies of cattle being offered.”
USDA said on Friday the daily hog slaughter dipped to 380,000. The daily cattle slaughter trimmed to 102,000.
— Christopher Walljasper reports on ag commodities for Reuters from Chicago.