CME cattle futures fall on positioning before USDA data release

Chicago Mercantile Exchange live cattle futures dipped slightly on Friday, while feeder cattle and lean hogs ticked up as traders squared positions prior to the release of the U.S. Department of Agriculture's Cattle on Feed report, after a choppy week of trading, analysts said.

December live cattle (LCZ24) ended down 0.100 cent at 189.150 cents per pound, while November feeder cattle futures (FCX24) settled up 0.050 cent at 248.575 cents per pound.

Wholesale pork prices mostly were higher, supporting lean hog futures on the day, as ham and belly cut-out values jumped sharply, the USDA reported Friday morning.

CME December lean hog futures (LHZ24) rose 1.025 cents to finish at 79.675 cents per pound.

Despite ups and downs in cattle futures this week, the beef packing industry was profitable, said Cassie Fish, author of the Beef blog.

Choice beef cutout prices moved higher, said Fish, so packers responded by increasing production with a large slaughter.

She said packers had also purchased a lot of cattle this week, signaling more production next week as margins are profitable.

Packers were in the black on Friday, estimated to be making $54.85 per head, down from $63.05 on Thursday and $57.00 a week ago, according to livestock marketing advisory service HedgersEdge.

The USDA's monthly Cattle on Feed report, released at 2:00 P.M. CDT after trading ended, showed there was nearly the same number of cattle in U.S. feedlots on Oct. 1 versus a year earlier. Market analysts had expected 0.3% fewer head of cattle, according to a Reuters poll.

"That could pressure the markets on Monday," said Fish.

Wholesale beef prices were higher, with the choice boxed beef cutout climbing $1.07 to $322.24 per hundredweight, the USDA reported Friday afternoon. Select boxed beef prices rose $0.74 to $295.08 per cwt.