CHICAGO, Feb 22 (Reuters) - Chicago Mercantile Exchange live cattle futures closed lower on Thursday on a round of profit-taking after the benchmark April contract hit a four-month high, and ahead of monthly U.S. feedlot data due after Friday's close, traders said.
Tightening U.S. cattle supplies and strong demand for feeder cattle underpinned the market.
CME April live cattle settled down 1.150 cents at 186.550 cents per pound, retreating after a climb to 189.200 cents, its highest since Oct. 20.
March feeder cattle futures ended up 0.700 cent at 252.050 cents per pound, clawing back into positive territory even as live cattle futures closed lower.
"Feeder cattle might be leading the charge because of the shortage of feeders, of replacement calves," said Dan Norcini, an independent livestock trader. The U.S. cattle herd has dwindled to its smallest level in more than seven decades, the U.S. Department of Agriculture reported last month.
Ahead of Friday's monthly USDA Cattle on Feed report, analysts surveyed by Reuters on average expect the government to report that placements of cattle into U.S. feedlots during January fell 11.6% from a year earlier.
"The placements number is going to be the big deal. Everybody knows the numbers are coming down, but the question is how many are going into the feedlot," Norcini said.
Hog futures rose on Thursday for a sixth straight session, fueled by strong cash hog prices, traders said.
CME April lean hogs settled up 1.225 cents at 87.200 cents per pound and June hogs ended up 0.950 cent at 98.925 cents.
The CME's Lean Hog Index, a two-day weighted average of cash prices, continued to ratchet upward, reaching 77.97 cents per pound, its highest reading since Oct. 25.
"The cash prices are unbelievably strong," Norcini said. "It just seems like there are not enough hogs around for packer demand."
Meanwhile, market players await Friday's weekly USDA export sales report, which should include revisions to last week's figures for pork sales. The USDA has said data showing large increases in weekly pork export sales and shipments in last week's report was incorrect. (Reporting by Julie Ingwersen; Editing by Leslie Adler)
