LIVESTOCK-CME live cattle top three-week high on U.S. supply worries
By Tom Polansek
CHICAGO, Nov 21 (Reuters) - Live cattle futures exceeded a three-week high at the Chicago Mercantile Exchange on Monday on worries about tightening U.S. supplies, while feeder cattle futures set a two-month high.
Traders focused on a monthly U.S. Department of Agriculture report, issued after the market closed on Friday, that showed cattle placements into feedlots in October were 6% below 2021. Analysts surveyed by Reuters had expected placements to drop by only about 3.5%.
Producers have been reducing their herds due to a severe drought in the western United States, sending animals to be slaughtered instead of keeping them to reproduce.
Most-active CME February live cattle futures settled up 0.875 cent at 156.725 cents per pound after reaching 156.875 cents, the contract's highest level since Oct. 28. The nearby December contract advanced 0.475 cent to finish at 153.550 cents per pound.
CME January feeder cattle, meanwhile, closed up 1.850 cents at 182.625 cents per pound and hit their highest price since Sept. 21 at 183.075 cents.
Weakness in Chicago Board of Trade corn futures helped support gains in cattle by signaling the potential for lower feed costs, brokers said.
Overall, the USDA on Friday reported the number of cattle on feed as of Nov. 1 at 11.706 million head, down 2% from last year. Analysts on average expected a decline of 1.7%.
With markets closed on Nov. 24 for Thanksgiving, meat packers have a short week to buy enough cattle for a full week of slaughter the following week.
Packers slaughtered an estimated 128,000 cattle on Monday, unchanged from a week earlier and up from 122,000 cattle a year ago, the USDA said in a daily report. An estimated 488,000 hogs were slaughtered, up from 485,000 hogs a week ago and 480,000 hogs a year ago.
The strong pace of slaughtering and demand from packers helped support CME lean hog futures, a broker said. The most-active February lean hogs contract settled up 0.600 cent at 90.150 cents per pound. (Reporting by Tom Polansek)
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