Chicago | Reuters — Chicago Mercantile Exchange live cattle futures were higher on Friday, boosted by short-covering in a rebound from an earlier one-week low, traders and analysts said.
Traders also were squaring their positions ahead of the U.S. Department’s monthly Cattle on Feed report, which was released after the close of trading.
The slightly bearish USDA data could pressure prices on Monday, potentially eliminating the small gains notched on Friday, the traders said.
USDA said 11.125 million cattle were in U.S. feedlots as of Sept. 1, six per cent more than a year ago. Analysts polled by Reuters expected 5.4 per cent more cattle in feedlots. Placements of cattle into feedyards for fattening during August totaled 2.07 million head, seven per cent more than a year ago and above analyst predictions for a 4.4 per cent gain.
U.S. Commodities analyst Don Roose said CME cattle futures could open 0.5 to one cent lower on Monday based on the report.
“We will have big supplies all the way through,” Roose said, adding that the data suggest more cattle will be available to beef packers from December to about March. “Overall, the report is more bearish December and February cattle (futures contracts).”
Prior to the report, CME October live cattle futures settled 0.625 cent higher at 113.075 cents/lb. and most-active December was up 0.55 cent, to 118.45 cents (all figures US$). CME October feeder cattle were up 0.8 cent to 158.075 cents/lb.
Cattle in U.S. Plains cash markets traded at $110.50-$111/cwt, in deals that were roughly steady with a week ago, traders said.
USDA will release monthly cold storage data on Monday, including beef and pork supplies in U.S. storage as of Aug. 31. A few analysts expected USDA to show, on average, 558.9 million pounds of pork and 483.9 million pounds of beef. Pork supplies were likely to rise slightly and beef stocks to decline, according to the analyst estimates.
Lean hog futures were mostly lower on Friday, pressured by profit-taking in the wake of recent multi-month highs. October hogs were down 0.95 cent to 60.3 cents/lb. and December hogs down 0.875 cent, to 57.4.
Hog operations were expected to resume slaughtering in North Carolina after Hurricane Florence disrupted the facilities for about a week in the No. 2 U.S. hog state after Iowa.
“They’re taking care of that backlog,” Allendale Inc. analyst Rich Nelson said of the plants.
— Michael Hirtzer reports on commodity markets for Reuters from Chicago.