CHICAGO, July 23 (Reuters) - CME feeder cattle futures firmed on Friday, bolstered by lower corn and wheat markets that may translate into eased feed costs, traders said. CME live cattle also gained and are expected to firm next week as the trade digests the U.S. Department of Agriculture’s monthly cattle on feed report released after the market close, showing fewer than anticipated cattle placed on feed. June cattle on feed placements fell to 93% versus a year prior, the USDA said, missing trade estimates by nearly 3 points. “We have a very well-supplied market in the short term,” said Rich Nelson, chief strategist at Allendale, Inc. “This is going to tighten up the December-March live cattle supply.” CME’s October live cattle futures, the most-active cattle contract, rose 0.475 cents to 127.150 cents per pound, while nearby August futures gained 0.700 cent to 121.5 cents. CME August feeder cattle finished 1.875 cents higher at 160.075 cents per pound. The long term outlook for cattle supplies dropped 1%, with 101 million head of cattle and calves in the U.S. as of July 1, according to the USDA’s biannual cattle report, also released Friday afternoon. “This will continue to tighten up the supply picture, for the next 2-3 years,” said Nelson. The wholesale beef market will likely remain elevated due to the tighter supply, Nelson said. Choice cuts of wholesale boxed beef added 49 cents to $266.63 per cwt, while select cuts gained 17 cents to $249.94 per cwt. “Wholesale and likely retail beef prices will remain elevated, if not increase more so in the coming 2-3 years,” said Nelson. Meanwhile, CME lean hogs gained as supply issues persist, with August futures climbing 0.700 cents to 106.65 cents per pound, while most-active October dipped 0.900 cent to 92.625 cents. Hog supplies are near a seasonal low, though Nelson said the slim supply of market-ready hogs is lower than anticipated. “They’re even tighter than we expected,” said Nelson, noting the drop in hogs ready for slaughter is three times bigger than anticipated in June. For the week, processors slaughtered 2.3 million hogs, down 2% from the same week a year ago. (Reporting by Christopher Walljasper; Editing by Sandra Maler) Our Standards: The Thomson Reuters Trust Principles.