Most U.S. live cattle gain on cash, report positioning

U.S. live cattle futures settled mostly firm on Friday, extending their weekly win streak to five, lifted by higher prices for cattle in the cash market, said analysts and traders.

Investors also adjusted positions before the U.S. Department of Agriculture’s monthly cattle-on-feed report this afternoon.

Chicago Mercantile Exchange (CME) hogs closed higher but feeder cattle ended mostly lower.

CME live cattle slipped at first on deliveries before mounting a comeback after packers in the U.S. Plains paid $120 to $121 per hundredweight (cwt) for cash cattle, up $1 to $2 compared to last week (all figures US$).

Spot August closed up 0.225 cents per pound, to 121.075 cents. October ended at 125.275 cents, down 0.275 cent higher and December finished up 0.125 cent to 128.2 cents.

Beef processors raised cash bids amid tight supplies and brisk beef demand while grocers bought product for the September 3 Labour Day holiday, a trader said.

USDA estimated the choice wholesale beef price Friday morning at $193.01 per cwt, $1.53 from Thursday and $8.72 higher than a week ago.

August feeder cattle futures gained with the mostly firm live cattle market. But other months wilted as corn prices remained around $8 per bushel, reducing feedlot demand for younger cattle.

Spot August feeder cattle closed up 0.1 cent/lb. to 140.425 cents. September finished at 142.2 cents, down 0.675 cent.

Hogs jump

CME hogs’ discount to CME’s lean hog index at 91.58 cents motivated buyers in a market that also drew short-covering support, said analysts and traders.

October hogs closed up 0.575 cent/lb. to 76.2 cents and December ended 0.7 cent higher at 73.6 cents.

Still, some investors were leery of the day’s rally as ample hogs and tepid pork demand reduced packer need for supplies.

"It (index) has been slowly grinding lower but that is going to change as slaughter numbers are ramping up even more quickly than I expected," he said.

Hog marketings have recently increased as cooler weather cause them to grow quicker. Also, some producers are liquidating their herds as drought in the Midwest pushed feed prices for livestock to all-time highs.

— Theopolis Waters writes for Reuters from Chicago.

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