LIVESTOCK-Cattle futures dip on profit-taking ahead of key USDA report

By P.J. Huffstutter

CHICAGO, July 24 (Reuters) - Chicago Mercantile Exchange live and feeder cattle futures ended lower on Thursday, as traders sought to take profits after this week's rally and position themselves ahead of a key government report, market analysts said.

Cattle traders are waiting for the the monthly U.S. Department of Agriculture (USDA) report on Friday, which analysts expect to show 0.8% fewer cattle in U.S. feedlots compared to a year ago.

Meanwhile, lean hog futures closed mixed on technical trading, with the most-active October contract LHV25 ending higher from higher U.S. weekly exports and a slowing domestic slaughter pace, traders said.

USDA reported that U.S. weekly pork exports were up 4% from the previous week - though down 13% from the prior 4-week average. The biggest pork export destinations for the week ended July 17 were Mexico, Japan, China, South Korea and Canada. Weekly beef exports were up 22% from the previous week but down 3% from the prior 4-week average, USDA data showed.

CME August lean hog futures LHQ25 ended down 0.275 cent at 108.200 cents per pound, while October LHV25 ended up 0.200 cent at 91.100 cents per pound.

Cattle traders said they are closely watching what will happen with beef supplies between the U.S. and Australia.

Australia will ease restrictions on U.S. beef imports, the country's agriculture ministry said on Thursday, potentially smoothing trade talks with U.S. President Donald Trump, who had attacked its rules.

But the decision, which U.S. Agriculture Secretary Brooke Rollins called a win for Trump, is unlikely to significantly boost U.S. shipments because beef prices are much lower in Australia, analysts said.

Wholesale beef prices firmed, with both choice and select cuts edging higher, according to USDA data.

"The cattle complex knows that consumers are starting to look at these retail beef prices a little harder," said Karl Setzer, a partner at Michigan-based Consus Ag. "At some point, this market is going to turn."

CME August live cattle futures LCQ25 settled down 1.225 cents at 225.800 cents per pound on Thursday, while most-active October live cattle futures LCV25 ended down 1.350 cents at 222.150 cents per pound.

CME August feeder cattle futures FCQ25 ended 2.625 cents lower at 328.900 cents per pound.