Chicago Mercantile Exchange (CME) cattle futures closed mixed after choppy trading on Wednesday as traders sought profits early in the session and adjusted their positions ahead of a key government cattle feedlot report, reported Reuters.
On Thursday, the US Department of Agriculture is expected to report that the country had 2.5% more cattle in feedlots as of June 1 than a year earlier, according to a Reuters poll of analysts. They estimated that May placements of cattle into feedlots would be down 5.5% from a year earlier while May marketings were seen down 10.6%.
Feeder cattle futures firmed, shrugging off pressure from strength in Chicago Board of Trade corn futures and higher crude oil prices.
The thinly traded CME June live cattle contract ticked up, but the most-active August contract and deferred months turned lower on pressure from strength in corn and crude oil futures, traders said. Higher feed and fuel-related transportation costs can add to higher beef prices, traders said.
Oil prices rose more than 1% on Wednesday after US President Donald Trump said the new ceasefire agreement with Iran was not final and the Iran war could resume if he is unsatisfied. Concerns over excess supply next year, however, limited the gains.
While trade has been limited in cash cattle markets this week, asking prices in Texas had jumped $2 from the previous week to about $260 to $262 per hundredweight (cwt), said Dax Wedemeyer, a broker and grains analyst with US Commodities in West Des Moines, Iowa.
"Between that and the market trying to prepare for the Cattle on Feed report tomorrow, you're seeing a lot of adjusting happening right now," Wedemeyer added.
CME June live cattle futures settled 0.425 cent higher at 255.725 cents per pound while benchmark August live cattle ended 0.35 cent lower at 248.85 cents.
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