Chicago Mercantile Exchange (CME) live cattle futures pulled back from a one-week high on Friday as traders engaged in profit-taking, while feeder cattle futures also retreated from their highest levels in nearly a month.
Profit-taking occurred as markets, which had recently benefited from rising equities and improved processor margins, faced a shift in momentum. The enhanced margins, which are anticipated to increase demand for slaughter-ready cattle, saw beef processors earning $54.30 per head of cattle slaughtered—an improvement from the losses experienced just a month prior, according to HedgersEdge.com.
The CME October live cattle futures (LCV24) closed down by 0.375 cents at 177.65 cents per pound, after reaching a high of 178.90 cents, the contract’s peak since September 5. Similarly, October feeder cattle futures (FCV24) ended 0.625 cents lower at 239.125 cents per pound, following an earlier rise to 241.375 cents, the highest level since mid-August.
Traders are anticipating next Friday’s USDA report, which will provide data on the number of cattle in feedlots as of the beginning of the month. As of August 1, there were 11.1 million cattle on feed, reflecting a 0.3 percent increase from the previous year.
On September 12, the USDA raised its forecast for U.S. beef production in 2024, attributing the increase to higher cattle slaughterings and heavier cattle weights anticipated in the latter half of the year. The USDA also adjusted its pork production projections upward for the second half of 2024, driven by a faster rate of pig slaughtering.
The USDA reported that packers slaughtered an estimated 118,000 cattle on Friday, down from 123,000 cattle the previous week and 121,084 cattle a year earlier. Additionally, an estimated 480,000 hogs were slaughtered, compared to 482,000 hogs the week before and 476,522 hogs during the same period last year.
CME lean hog futures were influenced by expectations of a seasonal increase in U.S. pig slaughter pace. October hog futures (LHV24) settled down 0.45 cents at 78.45 cents per pound, while December hog futures (LHZ24) ended 0.25 cents lower at 71.3 cents per pound.
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