CHICAGO, Nov 22 (Reuters) - U.S. live cattle futures fell to a one-week low and feeder cattle futures hit a six-week low on Friday ahead of a U.S. Department of Agriculture report that traders expected would show a hefty year-on-year increase in the number of cattle placed in feedlots last month.
February live cattle futures on the Chicago Mercantile Exchange (CME) settled down 1.200 cents at 123.850 cents per pound, with front-month December down 0.650 cent at 118.675 cents.
CME January feeder cattle futures tumbled 3.325 cents to close at 139.275 cents per pound after dipping to 138.275, the contract's lowest since Oct. 9.
Ahead of the USDA's report, analysts surveyed by Reuters on average expected the government to report the number of cattle placed in U.S. feedlots during October at about 2.5 million head, up 11.4% from a year earlier. The average estimate for the total number of cattle on feed as of Nov. 1 was 11.8 million head, up 1.1% from a year ago.
In its report, which was released shortly after the CME close, the USDA reported October placements in feedlots at 2.477 million head, up 10% from a year ago but just below the average trade estimate.
The USDA put the total number of cattle on feed at 11.831 million head, in line with the average trade estimate.
"The expectation of a bearish report had a good deal to do with the (futures) sell-off today," Brock Associates analyst Doug Houghton said. "The (USDA) report was not as bad as the average estimates would suggest, but ... it is still fundamentally bearish to have placements up over 10%, and to have the on-feed number up over year-ago," Houghton said.
Separately, in its monthly cold storage report, the USDA reported U.S. frozen stocks of beef at 466.2 million pounds as of Oct. 31, down 10% from a year earlier.
CME lean hog futures closed narrowly mixed, with the benchmark February contract settling modestly higher for a second straight day following a six-session slide.
Most-active February lean hogs closed up 0.200 cent at 67.650 cents per pound but ended the week down about 6%, pressured by uncertainty about prospects for a U.S.-China trade deal.
China has ramped up its imports of meat from global supplies over the last year as it struggles with African swine fever, a deadly animal disease that has slashed the size of the world's largest hog herd.
But China's imports of U.S. pork have been slowed by steep tariffs that Beijing imposed last year as part of the countries' trade war. A trade deal would likely open the door for increased pork shipments to Asia.
Underscoring the need for strong U.S. pork exports, the USDA reported frozen stocks of pork bellies at 45.920 million pounds, up 72% from a year ago.
"What we are seeing is no shortage of domestic pork, either in cold storage or on the hoof," said Don Roose, president of Iowa-based U.S. Commodities. (Reporting by Julie Ingwersen Editing by Sonya Hepinstall)