May 22, 2020 / 8:22 PM / 2 days ago

LIVESTOCK-Live and feeder cattle futures slip on disappointing cold storage data

CHICAGO, May 22 (Reuters) - U.S. live and feeder cattle futures closed lower on Friday after disappointing cold storage data the previous day and ahead of the U.S. Department of Agriculture’s Cattle on Feed report in the afternoon.

Lean hog futures also dropped, as backups continue at slaughter facilities, traders said.

The nearby CME live cattle futures contract lost 1.1 cents to close at 97.7 cents per lb, while August live cattle ended 0.9 cent lower at 97.325 cents per lb.

Feeder cattle contracts also weakened, with the August contract slipping 0.075 cent to 128.8 cents per lb.

June lean hogs lost 0.575 cents to 58.775 cents per lb, while the July contract sank 1.275 cents to 55.90 cents per lb.

The USDA showed a slight drop in cold storage meat supplies on Thursday, with beef dropping 2% from April, but still 14% higher than last year. Frozen pork was down just 1% from last year.

“There was no big draw down in stocks, which was a little counter to what the trade was expecting,” said Rich Nelson, chief strategist at Allendale Inc.

In its monthly report, the USDA said May 1 cattle on feed dropped to 95% from a year ago, while April placements were 78%, beating trade estimates of 77.4%.

Nelson said Friday’s report showed the backup in cattle isn’t going away anytime soon.

“We’re going to hold that backlog in place, all the way to September, when these low supplies start to drop off,” said Nelson. “September through December, we’ll have some relatively low supplies of cattle being offered.”

The USDA said on Friday the daily hog slaughter dipped to 380,000. The daily cattle slaughter trimmed to 102,000. (Reporting by Christopher Walljasper Editing by Paul Simao)

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