LIVESTOCK-Live cattle futures strengthen ahead of USDA report
CHICAGO, Sept 23 (Reuters) - U.S. live cattle futures gained on Wednesday, as traders weighed continued strong slaughter rates against expectations for higher placements in the Agriculture Department's end-of-week Cattle on Feed report.
"The beef market looks like it's possibly stabilizing, and that should be supportive for cattle prices in the near term," said Doug Houghton, analyst at Brock Capital Management.
The U.S. Department of Agriculture (USDA) estimated 120,000 head processed on Wednesday, up from 118,000 on the same day a year ago, but Houghton said summer backlogs of market-ready cattle could continue to work through the processing system through the new year.
"The report should show large placements again in August, which should be negative for the February and April contracts, which are already at large premiums to cash."
Chicago Mercantile Exchange October live cattle settled 0.675 cent higher at 107.150 cents per pound and December gained 1.025 cents to end at 111.200 cents.
CME October feeder cattle settled 0.900 cent higher at 141.525 cents per pound, and most-active November ended up 0.475 cents at 141.650 cents.
The USDA is scheduled to release its monthly Cattle on Feed report on Friday afternoon.
Lean hog futures added for a second day ahead of Thursday's quarterly Hogs and Pigs report, as traders expect the USDA to report smaller inventories.
"The front-end contracts are being supported by a strong cash market, and I think the back-end contracts were more cautious," said Houghton. "Expectations from the trade are for some further liquidation, which would be positive for those back-end contracts."
CME October lean hog futures settled 1.175 cents higher to end at 69.500 cents per pound and most-active December hogs rose 0.250 cents to 64.350 cents.
Hog markets were further energized by reports of increased pork purchases from China, which doubled it's imports from a year ago to 350,000 tonnes, customs data showed.
(Reporting by Christopher Walljasper; Editing by David Gregorio)
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