LIVESTOCK-Feeder cattle gain from falling feedgrain prices

CHICAGO, Jan 22 (Reuters) - CME Group feeder cattle futures rose on Friday, bolstered by falling corn futures.

March feeder cattle gained 5.000 cents to settle at 144.150 cents, adding 9.575 cents for the week - a 7.1% gain as corn fell 5.8%, its biggest drop since the week ending March 20, 2020.

CME's live cattle futures also gained, though the U.S. Department of Agriculture's monthly Cattle on Feed report, released after markets closed, showed higher than expected feedlot placements in December.

"We are, at this very moment in January, seeing the feed relationship impact brand new placements," said Rich Nelson, chief strategist at Allendale Inc. "Lower placements in January, and probably February, will lighten up the September, August and November finished cattle supply."

As of Jan. 1, the USDA reported December cattle feed placements at 101.0% compared to a year ago, above trade estimates of a 3% drop.

CME April live cattle futures ended 2.575 cents higher at 122.525 cents per pound, adding 4.325 cents for the week.

In addition to fewer placements, Nelson anticipates seeing carcass weights fall as feed costs pressure producers to move cattle through the feedlot more quickly.

"We might be turning the corner on excess weights and overfed heavyweight cattle still out in the country," he said.

Boxed beef cutout values continue to strengthen, with select cuts gaining for a seventh consecutive session, adding $3.06 per cwt to $213.34 and choice cuts adding $1.62 to $222.82 per cwt, according to the USDA.

Lean hog futures also gained on the plummet in corn prices. CME's most-active April lean hogs adding 2.250 cents to close at 76.150 cents per pound, while the spot February contract added 1.825 cents to end at 69.925 cents per pound.

For the week, April lean hogs added 3.500 cents, a 4.8% increase, its biggest since the week ending September 11, 2020. (Reporting by Christopher Walljasper in Chicago; Editing by Richard Chang)

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