Chicago | Reuters — U.S. livestock futures fell on Friday, as hog producers and cattle ranchers continue to struggle with a massive backlog even as many slaughterhouses come back online.
The U.S. Department of Agriculture’s monthly Cattle on Feed report, released Friday after the market close, showed May feedlot placements at 99 per cent compared to the same period last year, ahead of analyst expectations of 96 per cent.
The report showed placements are returning to near normal levels, but that the sector has not yet addressed backlogged cattle awaiting placement as slaughterhouses shut down due to the coronavirus pandemic.
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That, in turn, could have cattle futures facing a bit of bearish pressure on Monday, said Rich Nelson, chief strategist with Allendale Inc.
“For cattle, it’s probably going to be July before we start hitting that backlog,” Nelson said.
Chicago Mercantile Exchange August live cattle futures on Friday settled down 0.7 cent at 95.4 cents/lb. (all figures US$). August feeder cattle futures settled down down 0.425 cent at 132.55 cents/lb.
Processors killed an estimated 119,000 cattle on Friday, up from 115,000 cattle a week earlier, and equal to a year ago, USDA said.
Prices for choice cuts of boxed beef fell by $4.37, to $213.56/cwt, while select cuts dropped $4, to $204.08/cwt, according to USDA.
In the pork market, processors slaughtered about 457,000 hogs on Friday, compared with 432,000 hogs a week earlier and as many as 458,000 a day a year before, according to USDA data.
CME July lean hog futures fell 1.45 cents, to 48.45 cents/lb. August futures settled down 0.675 cent at 52.8 cents.
USDA said in a weekly export sales report that China bought 9,991 tonnes of U.S. pork in the week ended June 11, the biggest weekly total since April 30.
— Christopher Walljasper reports on agriculture and ag commodities for Reuters from Chicago.
