LIVESTOCK-Cattle futures climb, shrugging off lower beef prices

By Julie Ingwersen

CHICAGO, Sept 19 (Reuters) - Chicago Mercantile Exchange live cattle futures closed higher on Friday for a second straight day, supported by tight U.S. cattle supplies and strength in Wall Street equity markets that signaled continued strong demand for beef, brokers said.

CME October live cattle futures LCV25 settled up 1.200 cents at 233.575 cents per pound and December live cattle LCZ25 ended up 1.575 cents at 235.725 cents.

October feeder cattle FCV25 rose 2.375 cents to end at 354.100 cents per pound.

Monthly feedlot data from the U.S. Department of Agriculture, released after the close of the market, came in close to trade expectations.

The USDA reported the number of cattle in U.S. feedlots as of September 1 at 11.1 million head, down 1.05% from a year earlier, while analysts surveyed by Reuters ahead of the report on average had expected a slightly smaller drop of 0.9%.

The USDA said August feedlot placements were 90% of a year ago, below the average analyst estimate of 91%, and August marketings were 86% of a year ago, below analyst expectations for 87.2%.

The USDA's report "does not change the dynamics with what has been going on in the cattle market for months now," said Dan Norcini, an independent trader.

"We are still producing a lot less beef, and I just don't see that changing any time soon, based on these numbers," Norcini said.

Wholesale beef prices continued to retreat from near-record highs set in early September as the summer grilling season wound down. The USDA priced choice cuts of beef at $382.05 per hundredweight (cwt) on Friday afternoon, down $3.76 from Thursday.

Still, a strong week for Wall Street's main indexes bodes well for consumer beef demand, Norcini said. For the week, the S&P 500 rose 1.2%, the Nasdaq climbed 2.2% and the Dow added 1.05%.

"The stock market is still strong. People are making good money on the high end, and they are going to pay up for beef," Norcini said.

CME lean hog futures closed mostly higher on Friday, but the most-active December contract inched lower.

October hogs LHV25 settled up 0.500 cent at 97.975 cents per pound while December hogs LH25 ended down 0.075 cent at 87.625 cents.

The USDA priced the hog carcass cutout at $112.05 per cwt on Friday afternoon, up 10 cents from Thursday.