CHICAGO, April 23 (Reuters) - U.S. live cattle futures closed narrowly mixed on Friday, with nearby contracts pressured by lackluster cash cattle trade and position-squaring ahead of a monthly government cattle report, analysts said.
Chicago Mercantile Exchange June live cattle futures settled down 0.125 cent at 115.725 cents per pound while the August contract ended up 0.125 cent at 116.850 cents.
“Demand for beef remains strong, but packers struggle to move the volumes of cattle through their plants needed to meet that demand, which is holding down cash prices and therefore capping gains on the board,” Arlan Suderman, StoneX chief commodities economist, said in a client note.
Feeder cattle futures rallied on bargain-buying after a two-week slide. CME August feeders rose 1.525 cents to close at 149.900 cents per pound, but still posted a weekly decline of 3% as benchmark Chicago Board of Trade corn futures climbed to an eight-year high above $6 a bushel, signaling higher feed costs that threaten profitability.
However, in the longer term, high-priced corn could be supportive for cattle futures by limiting the growth of the U.S. cattle herd.
“The high feed costs discourage feedlot placements, so the fed cattle supplies will get tighter, you’d expect,” said Doug Houghton, analyst at Brock Capital Management.
After the CME close, the U.S. Department of Agriculture said the number of cattle placed in U.S. feedlots during March was up 28% from a year earlier. Analysts surveyed by Reuters on average expected a larger year-on-year increase of 33.7%.
The smaller-than-expected increase should help support cattle futures on Monday, analysts said.
Hog futures rose more than 2% on Friday on firm cash hog prices, brisk demand for pork and bargain-buying after a two-session slide. CME June lean hogs settled up 2.175 cents at 105.725 cents per pound.
“Wholesale pork prices and cash hog prices are still very firm. But there are concerns that wholesale prices are close to a top,” Houghton said. (Reporting by Julie Ingwersen; Editing by Will Dunham)
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