Cattle Rise on Declining Animal Supplies; Hog Futures Increase

Cattle futures rose to the highest level in more than two weeks on signs of declining supplies available to U.S. beef processors. Hog futures also gained.

Cattle for immediate delivery to slaughterhouses sold for as much as $1.01 a pound yesterday, up about 4 cents from the previous day, said Troy Vetterkind, the owner of Vetterkind Cattle Brokerage in Chicago. Wholesale beef yesterday reached the highest price since July 2008. U.S. feedlots held 10.9 million head of cattle on March 1, down 3 percent from a year earlier, government data show.

“The packers are short cattle, the cattle numbers are tight and the carcass weights are down,” Vetterkind said. “They have to pay up if they want them. Prices could stay firm for a couple of days.”

Cattle futures for June delivery rose 1.175 cents, or 1.3 percent, to 94.75 cents a pound on the Chicago Mercantile Exchange. The price earlier touched 95.45 cents, the highest level for a most-active contract since March 19. The commodity has climbed 10 percent this year, partly on increased beef demand. Feeder-cattle futures for May settlement jumped 1.025 cents, or 0.9 percent, to $1.1425 a pound.

Hogs rose after wholesale-pork prices gained for a fourth- straight session. Carcass prices as of yesterday were up 14 percent this year, partly because of declining availability of slaughter-ready animals. Ham prices rose 3.1 percent yesterday.

Hog futures for June settlement advanced 0.3 cent, or 0.4 percent, to 84.6 cents a pound in Chicago. The commodity earlier touched 85.9 cents, the highest level for a most-active contract since April 24, 1997.

Tony Dreibus
Source: Bloomberg