CHICAGO, July 23 (Reuters) - CME feeder cattle futures
firmed on Friday, bolstered by lower corn and wheat markets that
may translate into eased feed costs, traders said.
CME live cattle also gained and are expected to firm next
week as the trade digests the U.S. Department of Agriculture's
monthly cattle on feed report released after the market close,
showing fewer than anticipated cattle placed on feed.
June cattle on feed placements fell to 93% versus a year
prior, the USDA said, missing trade estimates by nearly 3
"We have a very well-supplied market in the short term,"
said Rich Nelson, chief strategist at Allendale, Inc. "This is
going to tighten up the December-March live cattle supply."
CME's October live cattle futures, the most-active
cattle contract, rose 0.475 cents to 127.150 cents per pound,
while nearby August futures gained 0.700 cent to 121.5
CME August feeder cattle finished 1.875 cents higher
at 160.075 cents per pound.
The long term outlook for cattle supplies dropped 1%, with
101 million head of cattle and calves in the U.S. as of July 1,
according to the USDA's biannual cattle report, also released
"This will continue to tighten up the supply picture, for
the next 2-3 years," said Nelson.
The wholesale beef market will likely remain elevated due to
the tighter supply, Nelson said. Choice cuts of wholesale boxed
beef added 49 cents to $266.63 per cwt, while select cuts gained
17 cents to $249.94 per cwt.
"Wholesale and likely retail beef prices will remain
elevated, if not increase more so in the coming 2-3 years," said
Meanwhile, CME lean hogs gained as supply issues persist,
with August futures climbing 0.700 cents to 106.65 cents
per pound, while most-active October dipped 0.900 cent to
Hog supplies are near a seasonal low, though Nelson said the
slim supply of market-ready hogs is lower than anticipated.
"They're even tighter than we expected," said Nelson, noting
the drop in hogs ready for slaughter is three times bigger than
anticipated in June.
For the week, processors slaughtered 2.3 million hogs, down
2% from the same week a year ago.
(Reporting by Christopher Walljasper; Editing by Sandra Maler)