November 21, 2018 / 8:59 PM / 10 months ago

LIVESTOCK-Cattle futures rally after bullish USDA data

    By Michael Hirtzer
    CHICAGO, Nov 21 (Reuters) - Chicago Mercantile Exchange
cattle futures were higher on Wednesday, extending earlier small
gains after government supply reports showed fewer-than-expected
U.S. cattle supplies, traders said.
    U.S. Department of Agriculture monthly Cattle on Feed data
showed 11.692 million cattle in U.S. feedlots as of Nov. 1. That
figure was 3 percent higher than a year ago but below analysts'
expectations for a 4.4 percent increase.             
    Placements of cattle in feedlots during October totaled
2.248 million, down 6 percent from a year ago and well below
expectations for only a 0.9 percent decline. Fewer cattle in
feedlots suggested less would be available to beef packers,
largely between March and June of 2019.
    "It means the supplies are going to tighten up a little bit
as we get into next year," said Don Roose, president of the
brokerage U.S. Commodities. "It was a report that basically was
positive across the board."    
    Live cattle futures         jumped more than 1 percent after
the midday data while feeder cattle         gained as much as 2
percent before each market pared gains. February live cattle
        settled up 1.025 cents at 120.750 cents per pound while
January feeder cattle         climbed 1.750 cents to 148.625.
    Uncertainty over how aggressively beef packers would bid to
buy cattle in cash markets limited potential gains in futures
despite the supportive USDA data, traders and analysts said.
    Separate USDA monthly data showed 515.7 million pounds of
beef and 570.6 million pounds of pork in cold storage at the end
of October, each relatively close to analyst estimates for 512.7
million pounds of beef and 573.4 million pounds of pork.
    Abundant supplies of both red meat and poultry have anchored
meat prices and prices for cattle, hogs and chicken this year.
    However, the spreading African swine fever virus in top pork
consumer and producer China has bolstered hog futures for weeks.
    China on Wednesday issued new rules to tighten notification
of cases of African swine fever, including incentives for
whistleblower, amid concerns that outbreaks of the highly
contagious disease are being under-reported. There have been
more than 60 outbreaks in 18 provinces since August.
    CME February lean hogs         settled down 0.950 cent at
66.175 cents per pound, declining the second straight session
after surging to a life-of-contract high earlier on Tuesday.
    CME livestock trading will halt on Thursday for the U.S.
Thanksgiving Day holiday.

 (Reporting by Michael Hirtzer; Editing by Richard Chang)
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