Livestock futures inched higher Thursday.
Traders were mostly positioning ahead of a series of government supply reports on Friday, analysts said. The U.S. Department of Agriculture is due to release cattle on-feed and cold storage reports for November, along with a quarterly hog-and-pig inventory report, at midday ET.
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Market observers mostly expect the reports to confirm a growing supply outlook for early next year, with large numbers of cattle and hogs being fattened for slaughter. For cattle particularly, analysts surveyed by The Wall Street Journal expect the total number of cattle on feed as of Dec. 1 to rise 6.7% from a year earlier, with cattle placed in lots in November up 5.8%.
Some observers said that much of the negativity around cattle supplies already had been factored into the market, leaving some room for higher prices. Cattle futures for December rose 0.2% to $1.19625 a pound at the Chicago Mercantile Exchange on Thursday after two consecutive days of losses.
Demand for beef has weakened in December, in keeping with seasonal trends. Wholesale beef fell sharply on Wednesday, dropping $3.67 to $198.09 per 100 pounds, before inching lower again at midday Thursday.
Falling beef prices have weighed on recent cattle prices, though some analysts expected the market to rebound once the seasonal weakness subsides.
"I just don't think there's any jeopardy of the cattle market falling apart," said John Welsh of the Price Futures Group. "It's going to stay tough as nails."
Cash prices for physical cattle this week were steady to higher than a week earlier. Meatpackers mostly paid $120 per 100 pounds on a live basis and as much as $191 dressed.
Hog futures also rose Thursday, supported by higher cash and pork prices the prior day. CME February lean hog futures gained 0.3% to 68.575 cents a pound.
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(END) Dow Jones Newswires
December 21, 2017 15:39 ET (20:39 GMT)