Chicago | Reuters — Chicago Mercantile Exchange live cattle futures closed higher on Friday, supported by strong beef prices and positioning ahead of U.S. government reports released after the close of the market, traders said.
CME August live cattle futures settled up 1.65 cents at 137.375 cents/lb. and most-active October ended up 2.025 cents at 143 cents (all figures US$).
“This market has rallied because product prices have been strong and some of the fears about demand have settled down,” said Altin Kalo, economist at Steiner Consulting Group.
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Wholesale beef prices eased on Friday afternoon, with choice cuts down 64 cents at $267.12 per hundredweight, according to the U.S. Department of Agriculture (USDA). But the price hit a three-month high on Tuesday, bucking seasonal tendencies for a summertime slump.
CME feeder cattle futures rose as corn prices slumped to multi-month lows, signaling cheaper feed costs. CME August feeder cattle futures ended up 3.275 cents at 181.550 cents per lb.
After the CME close, USDA said 1.629 million head of cattle were placed in feedlots during June, down two per cent from a year earlier. Analysts surveyed by Reuters on average had expected a larger drop in placements of five per cent, or 1.586 million head.
Some analysts said hot and dry weather could be pushing a larger-than-expected number of cattle into feedlots this summer as grazing pastures deteriorate.
USDA reported the total number of cattle on feed as of July 1 at 11.34 million head, up slightly from a year ago and in line with expectations. June marketings of 2.061 million head were up two per cent from a year ago, also in line with expectations.
In its semiannual cattle inventory report, USDA put the number of U.S. cattle and calves as of July 1 at 98.8 million head, down two per cent from a year ago.
In hog markets, CME lean hog futures closed higher with the front August contract extending its gain against back months in response to firm cash hog prices. The CME Lean Hog Index, a two-day weighted average of cash hog prices, reached $117.04 per hundredweight (cwt), its highest in 13 months.
CME August lean hog futures settled up 2.4 cents at 118.7 cents/lb. while most-active October hogs ended 0.55 cent higher at 96.325 cents.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago.
