Chicago | Reuters — U.S. live cattle futures finished roughly unchanged on Friday, reversing from earlier steep losses as investors squared up positions ahead of a monthly supply report that was released after the market close, traders and analysts said.
Feeder cattle and lean hogs also settled about flat at the Chicago Mercantile Exchange, in technically driven trades against the backdrop of abundant U.S. meat supplies.
Front-month CME October live cattle futures fell more than one per cent to a 1-1/2 week low early in the session as investors priced in an expected jump in placements in the U.S. Department of Agriculture’s Cattle on Feed report.
USDA in the report said 1.879 million head were placed on feed for fattening in August, up from 1.588 million in the same month in 2015 and a four-year high for that month. The placements of 115 per cent of last year topped the average analyst estimate of 112.6 per cent.
“The trade was a little concerned about the well-advertised placement number. People were taking profits and getting out ahead of the report,” Allendale Inc. analyst Rich Nelson said.
However, after live cattle futures reached their session lows, some investors bought back into the market.
CME October live cattle settled 0.2 cent higher at 107.275 cents/lb., up from their low of 104.425 (all figures US$). CME October feeder cattle also trimmed losses, edging 0.175 cent lower to 136.825 cents/lb.
Few trades in U.S. Plains cash cattle markets were established this week, and some beef packers could also have been buying futures instead of physical cattle supplies, Top Third Ag Marketing analyst Craig VanDyke said.
CME October lean hogs were down 0.2 cents, to 54 cents/lb., but held above recent contract lows.
“There’s no friendliness in hogs,” VanDyke said. “With heavy (animal) weights and no strength in the product, we have a lot of pork coming to the market.”
USDA separately said there were 607.2 million lbs. of pork in cold storage and 476.6 million lbs. of beef. A few analysts estimated pork in cold storage at 615.9 million lbs. and beef at 462.7 million lbs.
— Michael Hirtzer reports on ag commodity markets for Reuters from Chicago.