U.S. livestock: CME live cattle rally before USDA report

Chicago | Reuters — Chicago Mercantile Exchange live cattle futures closed higher on Friday, with support from buy stops and late-session short-covering before the afternoon’s U.S. Department of Agriculture monthly Cattle on Feed report, said traders.

Analysts viewed the report as mildly bearish for live cattle futures on Monday due to May cattle placements that hit a 10-year high for the month, but were still fewer than some had expected.

June, which will expire on June 30, closed 0.575 cent/lb. higher at 119.2 cents (all figures US$). Most actively traded August finished one cent higher at 115.275 cents.

Futures drew more support from their discounts to this week’s cash prices that came in lower than last week, given sufficient supplies and slack seasonal wholesale beef demand, said traders.

This week market-ready, or cash, cattle in the U.S. Plains brought $118-$123/cwt, down from $127-$134 a week earlier, said feedlot sources.

Investors will monitor next week’s cash prices as beef demand tends to struggle this time of year and packers plan to shutter plants over the U.S. Fourth of July holiday.

Softer corn prices and live cattle futures buying boosted CME feeder cattle futures.

August feeders ended 1.5 cents/lb. higher at 144.95 cents.

Hogs close mostly lower

Technical selling and continued cash hog price weakness pressured most CME lean hog contracts, said traders.

They said thinly traded July drew support from its discount to the exchange’s hog index for June 21 at 89.3 cents.

July ended up 0.275 cent per pound at 85.3 cents. August closed 1.225 cents lower at 78.65 cents, and below the 40-day moving average of 79.313 cents. October finished 0.675 cent lower at 68.2 cents, below the 20-day moving average of 68.505 cents.

Farmers are sending hogs to market ahead of schedule knowing prices for them tend to decline heading into major U.S. holidays, traders and analysts said.

They said a few grocers are buying pork for Fourth of July holiday cookouts and ahead of plant disruptions during the holiday.

— Theopolis Waters reports on livestock markets for Reuters from Chicago.

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