LIVESTOCK-Live cattle slide ahead of cattle on feed report

CHICAGO, Aug 21 (Reuters) - Chicago Mercantile Exchange live cattle futures fell on Friday on profit-taking and positioning ahead of the U.S. Department of Agriculture’s Cattle on Feed report, released after the markets closed.

CME lean hog futures also ended lower, correcting after two days of positive movement, as optimism over rising hog slaughter rates strengthened the markets.

CME benchmark October live cattle ended 1.225 cents lower at 108.550 cents per pound. October feeder cattle lost 1.100 cents to end at 145.275 cents per pound.

For the week, October live and feeder cattle traded 1.5% lower.

“We’ve seen live cattle back off a little in the last couple days, but we’re really just pulling back in what has otherwise been a strong uptrend in the last couple weeks,” said Dan Hussey, senior market strategist at Zaner Group.

Strong wholesale beef prices underpinned the market. Choice cuts gained 61 cents at midday to $225.99 per cwt, while select cuts climbed $2.92 to $209.23.

After the close, the USDA’s monthly Cattle on Feed report showed July placements at 111% of a year ago, above the average estimate in a Reuters analyst poll of 105.9%. The number of cattle on feed as of Aug. 1, at 11.284 million head, was 102% of the year prior, above the average trade estimate of 100.7%.

“We could see a down move on Monday,” said Brian Hoops, senior market analyst at Midwest Market Solutions.

Meanwhile, lean hog futures pulled back, after gaining 2.3% for the week as hog slaughter rates increased to pre-COVID 19 levels.

CME October lean hogs fell 0.925 cents to close at 54.250 cents per pound.

“These hogs were probably priced way too cheaply and needed some recovery,” Hoops said.

Daily hog slaughter reached 476,000 head, making the weekly total estimated slaughter 2.618 million head. (Reporting by Christopher Walljasper; Editing by Will Dunham)