By Theopolis Waters
CHICAGO, Sept 20 (Reuters) – Chicago Mercantile Exchange live cattle futures gained modestly on Friday as investors adjusted positions ahead of the U.S. Department of Agriculture’s monthly cattle-on-feed report
Analysts expected the report, released on Friday at 2:00 p.m. CDT (1900 GMT), to show the number of cattle moved into U.S. feedlots in August declined to its lowest level for the month in 17 years
The U.S. government’s separate monthly cold storage report will be issued on Monday at 2 p.m. CDT (1900 GMT). The data will include August total beef and pork inventories
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Live cattle October closed up 0.025 cent per lb at 125.950 cents. December finished up 0.025 cent at 129.750 cents
Futures’ positive settlement for a third straight day stirred expectations for steady cash cattle prices
Slack beef demand and unprofitable margins could keep a lid on cash prices
Cash cattle bids in Texas and Kansas were at $121 per hundredweight (cwt) versus asking prices of $125, feedlot sources said. Last week, cash cattle in Texas and Kansas traded at $123, and in Nebraska at $123.50
USDA data on Friday morning showed the wholesale choice beef price, or cutout, at $192.45 per cwt, down 56 cents from Thursday. Select cuts were 79 cents lower at $176.11
Estimated margins for U.S. beef packers were a negative $0.60 per head, compared with a negative $0.25 on Thursday and a positive $1.50 a week ago, according to HedgersEdge.com
The September feeder cattle contract closed down 0.050 cent per lb at 157.100 cents. It was nearly inline with CME’s feeder cattle index at 156.77
Other CME feeder cattle months closed higher, supported by firm live cattle futures and lower corn prices. Cheaper corn may encourage feedlots to buy young cattle
October ended 0.850 cent per lb higher at 160.225 cents while November settled 0.725 cent higher at 160.750 cents
HOGS FALL AS FUNDS SELL CME hogs slid on fund selling and profit taking before the weekend, traders and analysts said
Market losses pressed October and December futures below their 10-day moving average support levels, which triggered sell stops
October hogs finished 1.100 cents per lb lower at 90.050 cents and below the 10-day moving average of 90.89 cents
December closed at 86.075 cents, 1.225 cents lower. It finished below the 10-day moving average of 87.43 cents, but above the 20-day moving average of 85.95 cents
The possibility of cash hog and wholesale pork prices topping out for the summer deterred potential hog futures buyers, a trader said
Some packers are expected to curtail slaughter operations next week to realign their margins and offset a brief supply shortage in parts of the Midwest
HedgersEdge.com estimated U.S. pork packer margins on Friday at a negative $2.20 per head, compared with a positive $1.10 on Thursday and a negative $2.45 a week ago
A seasonal increase in hog numbers is seen pressuring cash hog prices while pumping more pork into the retail sector, the trader said
USDA’s Friday morning data reported the average hog price in the most-watched Iowa/Minnesota market at $74.03 per cwt, $1.54 higher than on Thursday.
