U.S. live cattle futures settled lower on Friday, snapping five weeks of consecutive gains, amid profit taking and as the threat of more deliveries pressured the thinly-traded August contract, said analysts and traders.
Also, feeder cattle at the Chicago Mercantile Exchange ended lower but extended their weekly gains to five. And hog futures slipped on Friday, posting back-to-back weekly losses.
CME live cattle turned lower after recent market advances led by strong wholesale beef demand and steady cash cattle prices spawned profit taking on Friday. Also, uncertainty about deliveries and subsequent cash direction motivated sellers.
Spot August live cattle closed down 0.450 cent per lb to 119.875 cents. October ended at 124.450 cents, down 0.475 cents. Cash cattle in the southern U.S. southern Plain moved at $120 to $121 per cwt, fully steady with last week's sales, due to less cattle available for sale, said feedlot sources.
"Tight cattle numbers and strong wholesale beef demand gave us reasons to buy futures this week. That could change next week as the industry, packers and supermarkets, need less supplies going into the U.S. Labor Day holiday on September 3," a trader said.
The U.S. Department of Agriculture estimated the Friday morning choice wholesale beef price at $193.65 per cwt, down 18 cents from Thursday but up $2.69 from the same day last week.
This week's cattle slaughter was pegged at 653,000 head, up 10,000 from last week but 25,000 less than for the same period a year earlier, said USDA.
Feeder cattle futures turned lower on profit taking and along with live cattle market losses. Feeders drifted downward despite weaker corn prices which could help ease feed input costs for cattle feeding operations.
Spot August feeder cattle closed 0.775 cent per lb lower at 140.500 cents. Most-actively traded September finished at 142.950 cents, down 0.525 cent.
CME hogs finished weak as packers continued to trim bids for cash hogs amid a buildup in hog numbers and sluggish wholesale pork demand, analysts and traders said.
Spot October hogs closed down 0.200 cent at 72.375 cents per lb. December finished down 0.025 cent at 70.575 cents. In recent weeks, hog marketings have increased after a break in hot weather caused animals to grow quicker. Some producers are also sending their hogs to market ahead of schedule after the worst U.S. drought in more than 50 years shot feed grain prices to record highs.
This week's government weekly weight data showed hogs in the Iowa/southern Minnesota market for last week averaged 267.7 lbs, up 1.7 lbs from the week before and 5.2 lbs higher than the same period a year ago.
An estimated 2.265 million hogs are to be processed this week, which is up 99,000 from last week and 142,000 more than a year ago for the same period, according to USDA data.
Meanwhile, the prospect that the rush of hogs to market now would lead to tighter supplies in 2013 lifted the deep-deferred hog trading months, traders and analysts said.