By Theopolis Waters
CHICAGO, May 16 (Reuters) – Chicago Mercantile Exchange live cattle gained modestly on Friday as investors tweaked positions before the U.S. Department of Agriculture’s Cattle-On-Feed report at 2 p.m. CDT, traders said.
Analysts expect the data to show cattle placements last month declined from April 2013 after several years of drought in parts of the United States reduced the herd to a 63-year low.
CME live cattle remained undervalued compared to prices for slaugher-ready or cash cattle, which generated further buying, traders said.
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U.S. livestock: Cattle futures come down from highs
Cattle futures on the Chicago Mercantile Exchange were weaker on Monday, coming down from recent highs.
They said Friday morning’s wholesale beef price uptick provided more support to futures.
The Friday morning wholesale choice beef price jumped $1.51 per cwt from Thursday to $226.72. Select cuts climbed $1.53 to $217.00, said the USDA.
This week, cash cattle in Texas and Kansas, on average, moved at $145 per hundredweight (cwt), down $1 from last week, said feedlot sources. They reported cash cattle sales of $148 in Nebraska, compared to $148 to $150 a week ago.
Packers cut slaughters and pressured cash cattle bids while looking ahead to a seasonal increase in supplies.
On Monday, investors will digest Friday’s USDA cattle report while anticipating cash cattle prices as packers buy animals for the Memorial Day holiday-shortened workweek.
June ended at 137.900 cents, 0.500 cent higher and August up 0.550 cent at 138.375 cents.
CME feeder cattle set a new high for a third straight day, fueled by higher live cattle futures and tight feeder cattle expectations.
May closed up 1.150 cents per lb at 187.300 cents, and August up 0.900 cent at 193.325 cents.
HOGS SLIP ON AMPLE SUPPLIES
CME hogs were weakened by soft prices for slaughter-ready or cash hogs as packers trimmed kills to make up for production lost from the fatal Porcine Epidemic Diarrhea virus, traders said.
The average hog price in the western Midwest region sagged 69 cents per cwt to $108.95, according to USDA data.
Packers on Friday processed 345,000 hogs, 29,000 fewer than last week and 46,000 less than a year ago, said USDA.
More hogs may come to market next week as farmers move animals ahead of schedule to avoid lower returns as the three-day Memorial Day holiday approaches, a trader said.
Anticipation of tight supplies this summer pegged to PEDv, and hot weather at that time that slow down animal weight gains, could help underpin hog futures on Monday, traders and analysts said.
June hogs ended 0.500 cent lower at 118.925, and July down 0.100 cent at 125.250.
