Chicago | Reuters – U.S. live cattle futures stretched to 5-1/2-month highs on Friday, lifted by strong cash cattle and beef prices and positioning ahead of a monthly cattle supply report.
Cash cattle at southern U.S. Plains feedlot markets traded around $110 per cwt or more this week, up from an average of $108 last week, traders said.
The wholesale choice beef price hit $225.44 per cwt on Friday, up $7.40 in the week, the U.S. Department of Agriculture (USDA) said.
After the close, the USDA said the number of cattle at feedlots on Oct. 1 fell 1.1 percent from a year earlier. September cattle placements were up 2% from a year earlier while marketings rose 1.1 percent.
“Placements were down the previous month and there were some dryness issues popping up in parts of the southern Plains that moved some cattle into the feedlots,” said Alan Brugler, president of Brugler Marketing & Management.
“Marketings were the wildcard. The Tyson plant fire was in August, but you still had some dislocation of cattle for a couple of weeks,” he said.
The data was unlikely to spark strong gains once markets reopen on Monday as it was largely in line with trade expectations.
Chicago Mercantile Exchange (CME) October live cattle ended 1.550 cents higher at 111.975 cents per pound. The December contract added 1.350 cents to 116.075 cents per pound, the highest since May 2.
Feeder cattle followed live cattle higher, with November futures up 1.200 cents at 145.375 cents per pound and the actively traded January contract up 1.025 at 141.600 cents.
Lean hog futures were higher most of the day as short-covering lifted prices, but the market ended mixed on pressure from ample hog supplies and weakening prices.
Cash prices in the closely followed Iowa and southern Minnesota market fell 88 cents per cwt on Friday to a weighted average price of $52.57 per cwt, according to the USDA.
CME December hogs peaked at 66.175 cents per pound, but failed to break through chart resistance at its 50-moving average and settled 0.375 cent higher at 64.925 cents.
Traders are monitoring trade talks between the United States and China, the world’s top pork consumer, as a trade deal would likely include higher pork imports.
The U.S. Trade Representative’s office said trade officials from both countries are “close to finalizing” some parts of an agreement on Friday, but provided no details on the areas of progress.