Chicago | Reuters — U.S. live cattle futures closed steady to firm on Friday, stabilizing after a two-session rally attributed to speculative buying and signs that meat packers may have worked through much of a backlog of market-ready cattle, traders said.

Chicago Mercantile Exchange (CME) August live cattle futures settled unchanged at 103.275 cents/lb. and October live cattle rose 0.275 cent to 106.875 cents (all figures US$). For the week, the CME August contract rose three per cent, posting its fifth consecutive weekly advance.

“We’re getting overbought,” said Matt Wiegand, commodity broker for FuturesOne.

CME August feeder cattle futures settled up 0.1 cent on Friday at 142.7 cents/lb., finishing the week up five per cent.

Cattle futures rose this week as cattle traded in the cash market at prices that were steady to higher compared with last week. Some traders view the trend as a sign that meat packers have worked through a backlog of market-ready cattle created this spring, when numerous slaughterhouses had to close temporarily after the coronavirus sickened workers.

“We are getting closer to being current,” Wiegand said, although he noted that wholesale beef prices have yet to rally, due in part to a seasonal mid-summer slide in consumer demand.

Prices for choice cuts of boxed beef on Friday afternoon fell 33 cents, to $200.47/cwt, and select cuts fell 99 cents, to $190.31/cwt, according to USDA.

“The concern going forward is, we pushed packing plant workforces hard to catch up. They may need to slow down a little bit to take a breather and pull back for maintenance,” Wiegand said.

Uncertainty about beef demand from the restaurant and food service sector hangs over the market, capping rallies, as the United States struggles with the coronavirus pandemic.

CME lean hog futures fell on profit-taking a day after the front contract hit a four-week high.

CME August lean hog futures settled down 0.85 cent on Friday at 52.8 cents/lb. For the week, the contract rose 5.9 per cent, its third straight weekly climb.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago.