CHICAGO, July 27 (Reuters) - U.S. live cattle futures opened firm on Monday but retreated from session highs on technical selling and lingering concerns about cattle supply backups in the wake of recent packing plant closures due to coronavirus infections among workers.
Prices climbed at Monday’s open in reaction to Friday’s U.S. Department of Agriculture (USDA) cattle on feed report, which showed monthly on-feed numbers and marketings largely within trade expectations. The July 1 on-feed supply dipped from a record high a year earlier.
But a biannual USDA cattle inventory report, also released on Friday, showed a slight expansion of the U.S. cattle and calf herd from a year ago.
“You had a lot of cross-currents between the cattle inventory and the cattle on feed,” said Alan Brugler, president of Brugler Marketing & Management.
“The bearish factor that won the day was that, if you look at the cattle inventory report, you actually had a little expansion versus a year ago. It looked like we were in the downside of the cattle cycle, but because of the COVID backups we actually had higher overall numbers,” he said.
Chicago Mercantile Exchange (CME) August live cattle futures settled down 0.900 cent at 100.425 cents per pound and October live cattle fell 1.275 cents to 103.825 cents per pound.
CME August feeder cattle futures dropped 2.700 cents to 139.350 cents per pound, while September feeder cattle dropped 3.125 cents to 139.625 cents per pound.
Both live and feeder cattle futures came under technical selling pressure.
CME lean hog futures ended mixed, with nearby contracts buoyed by firming cash hog and pork prices.
August futures settled up 0.550 cent at 54.550 cents per pound while October futures gained 0.600 cent to end at 50.750 cents per pound. Deferred contracts were down as much as 0.800 cent. (Reporting by Karl Plume; Editing by David Gregorio)