CHICAGO (Dow Jones)--U.S. live cattle futures opened higher Friday as traders seized on bullish long-term supply signals, despite a worse-than-expected unemployment report.

Contracts for cattle in August rose 0.57 cent, or 0.5%, to $1.153 a pound in trading at the Chicago Mercantile Exchange. CME October cattle contracts rose 0.32 cent, or 0.3%, to $1.215 a pound. August feeder cattle contracts rose 0.85 cent, or 0.6%, to $1.448 a pound.

Futures moved higher after a number of analysts and brokers said big funds and investors went on a buying spree Thursday, emboldened by forecasts of a shrinking supply of live animals after summer. A Goldman Sachs report Thursday forecast "sharply lower" live cattle supplies by year-end and the bank raised its six-month futures price forecast by 15 cents to $1.30 a pound.

Traders have been awaiting the first cash deals of the week to signal the strength of demand for beef during the summer weeks between July 4 and Labor Day, when sales typically slow as hotter weather deters consumers from grilling meat.

"The focus today will be on the cash market," said David Hutchins, president of Amarillo Brokerage.

The first reported deals, which were struck Friday morning, were higher than the week before, suggesting some meat packers were reluctantly pressured to raise their bids after Thursday's rally in futures.

A bearish jobs report Friday morning initially slowed the momentum of cattle futures, which have been heading steadily upward since mid-June. Unemployment levels are important to the beef industry since consumers typically scale back their meat buying when household incomes fall.

Cash cattle sales are reported in Nebraska at $1.84 a pound dressed basis to a major packer and $1.85 a pound to regional packers, up mostly 5 cents a pound from sales there last week.

Cattle are now trading at $1.15 a pound in the Texas Panhandle and Kansas, up 2 to 3 cents a pound from last week's sales.

The U.S. Department of Agriculture's choice beef carcass composite value Thursday rose 29 cents to $179.67 a hundred pounds. Select was up 24 cents to $174.17 a hundred pounds.

The latest HedgersEdge packer margin index is plus $31.75 a head, compared with $29.25 the previous day. The weekly average index is at plus $24.90. This is an estimate of packer returns on the cattle they slaughter and process expressed in the form of an index.

Friday's cattle slaughter is projected to be about 129,000 head and Saturday's at 55,000 head.