Chicago Mercantile Exchange live cattle futures closed higher on Friday, on short-covering and positioning before the U.S. Department of Agriculture’s monthly Cattle-On-Feed report at 2 p.m. CST (2000 GMT).
Analysts expect the data to show high-priced calves prompted feedlots to buy fewer of them for fattening.
Sluggish wholesale beef demand and uncertainty regarding prices for unsold market-ready or cash cattle at times slowed advances.
This week, a small number of cash cattle sold in the U.S. Plains at $156 to $157 per hundredweight (cwt).
Friday morning’s choice wholesale beef price plunged $3.12 per cwt from Thursday to $238.83. Select slipped 19 cents to $230.13, based on USDA data.
Packers are handcuffed by their poor margins and the inability to sell high-priced beef to retailers, an analyst said.
Processors need fewer cattle due to plant closures over the Christmas and New Year’s holidays.
Feedlots are holding out for more money following futures’ recent rally, traders and analysts said.
Preliminary pit settlements shows December live cattle 2.050 cents per lb higher at 160.750 cents, and February up 1.525 cents to 160.050 cents.
CME feeder cattle ended sharply higher with support from weak corn prices and live cattle market advances.
January closed up 2.925 cents per lb to 220.000 cents, and March 4.225 cents higher at 218.000 cents.
Hogs moderately lower
CME hogs settled slightly lower, weighed on by softer wholesale pork values and downward-trending prices for slaughter-ready or cash hogs, traders said.
February closed down 0.025 cent per lb to 81.850 cents, and April at 83.100 cents, 0.125 cent weaker.
Slaughter hog prices in the Midwest fell by as much as $2 per cwt, according to hog dealers in the region.
USDA quoted the morning’s wholesale pork price at $86.43, down 95 cents per cwt from Thursday, with all categories lower except loins.
Packers have sufficient inventories through the Christmas holiday as farmers truck hogs to market ahead of schedule to avoid lower prices, an analyst said.
Grocers are booking small amounts of meat until they can determine how much product sold over the year-end holidays, he said.
USDA will issue the monthly cold storage report on Monday at 2 p.m. CST (2000) to include November total pork and beef inventories.
A few analysts, on average, forecasted pork and beef stocks totaled 497.9 mln lbs, and 386.2 mln lbs, respectively.