Chicago Mercantile Exchange live cattle futures rose for a third day in a row on Friday, supported by Thursday's record-high prices for market-ready or cash cattle, traders said.
At 8:30 a.m. CDT (1330 GMT), live cattle October was 0.875 cent per lb higher at 169.925 cents, and December was 0.450 cent higher at 169.550 cents.
On Thursday, cash cattle in the U.S. Plains traded at mostly $170 per hundredweight (cwt), said feedlot sources. That was up $6 from a week ago and surpassed the July top of $166 in some areas.
Tight supplies and futures' recent run up to new highs forced packers to spend more for cattle which, along with the weaker cutout, will severely hurt their margins.
Thursday afternoon's choice wholesale beef price, or cutout, dropped $1.57 per cwt from Wednesday to $249.43. Select fell $1.53 cents to $233.54, the U.S. Department of Agriculture said.
Profit-taking and positioning before USDA's monthly Cattle-On-Feed report on Friday at 2 p.m. CDT (1900 GMT) slowed futures' advances.
Analysts expect Friday's report to show placements of cattle in U.S. feedyards likely increased last month compared to a year ago.
There were no live cattle deliveries reported by CME late on Thursday against the October trading month that will expire on Oct. 31.
CME Group will reduce electronic trading hours for its livestock markets effective Monday, Oct. 27.
FEEDER CATTLE - October, which will expire on Oct. 30, was at 240.500 cents, up 0.275 cent, and November was 0.875 cents higher at 237.575 cents.
CME feeder cattle contracts garnered support from live cattle futures buying.
LEAN HOGS - December was down 0.650 cent per lb at 88.075 cents, and February at 86.550 cents, down 0.900 cent.
Slumping cash and wholesale pork prices weighed on CME lean hog futures, traders said.
Thursday afternoon's average hog price in Iowa/Minnesota was down $1.43 per cwt to $90.87 from Wednesday, USDA said.
Separate U.S. government data showed the Thursday afternoon wholesale pork price was down 62 cents per cwt to $100.54 from Wednesday.
Expanding seasonal supplies landed more hogs at packing plants and put more pork in the hands of retailers and restaurateurs, an analyst said.
Market bulls are banking on consumers shifting their preference to relatively low-cost pork and away from high-priced beef.
Futures' discount to CME's hog index for Oct. 21 at 104.17 cents minimized losses. However, the gap between futures and the index has narrowed after cash prices trended lower.