CHICAGO, Aug 18 (Reuters) - Chicago Mercantile Exchange live cattle futures ended higher on Friday after dropping to a six-week low, as traders adjusted positions before a government report showed lower-than-expected placements in U.S. feedlots last month.
The data, which the U.S. Department of Agriculture (USDA) issued after trading ended, should further support cattle futures next week, traders said.
The USDA report said cattle placements into feedlots during July totaled 1.62 million head, down 8.3% from 2022. Analysts were expecting a 5.5% drop.
A rise in prices for grains used for livestock feed during the second half of July likely discouraged producers from placing cattle into feedlots, said Altin Kalo, agricultural economist for Steiner Consulting. Also, some geographic areas had improved pastureland for grazing, allowing producers to keep the animals out of feedlots, he said.
Drought prompted U.S. cattle producers to reduce their herds since last year by driving up feed costs and reducing the amount of pasture available for grazing.
"Some areas had some better grass," Kalo said.
Most-active October live cattle ended up 0.500 cent at 178.825 cents per pound after hitting the lowest price since July 7. September feeder cattle rose 1.4 cents to close at 248.525 cents per pound at the CME.
Next week, activity in outside markets could influence cattle futures, along with Friday's USDA report, Kalo said.
"How much is that going to temper what I would construe as a moderately bullish report?" he said.
The USDA report also said 11 million cattle were on feed for the slaughter market as of Aug. 1, down 2.3% from a year earlier. Analysts were expecting a 1.6% decline.
In the lean hog market, most-active October futures climbed 2.975 cents to 82.125 cents per pound, after falling on Wednesday to their lowest price since June 30.
The USDA quoted the wholesale pork carcass cutout at $106.17 per cwt, down $1.62 from Thursday. (Reporting by Tom Polansek; Editing by Cynthia Osterman)
