Chicago | Reuters — Live cattle futures climbed to a near two-month high on Wednesday, rising for the third straight session on firm beef prices and investment fund buying, traders and analysts said.
A reduced rate of cattle slaughter following a winter storm in the U.S. Plains that disrupted the transportation of animals earlier this week forced some meat buyers to scramble to find what they needed, bolstering prices.
Front-month Chicago Mercantile Exchange February live cattle finished up 0.7 cent at 125.425 cents/lb., rising to the highest level since Nov. 30 (all figures US$). Most-active CME April live cattle was up 0.35 cent to 125.15 cents.
Choice-grade wholesale beef gained $1.14, to $207.99/cwt, according to the U.S. Department of Agriculture.
“We got a big slug of snow, which has affected the (cattle) prices and propped the beef up,” said Kevin Bost, president of Procurement Strategies Inc. “The funds have been good buyers and that’s always a strong influence.”
Live cattle futures have gained in eight of the past nine trading session while open interest increased to the largest since early December, an indication that funds and other investors were making new long bets during the rally.
No sales were recorded on Wednesday at the weekly Fed Cattle Exchange online auction in which 494 cattle were offered, according to the auction website.
Beef, pork in U.S. cold storage
USDA in a monthly Cold Storage report released after the close of futures trading said 489.5 million lbs. of beef were in U.S. freezers as of Dec. 31. That was up from 485.2 million lbs. at the end of November but below analyst estimates for 504.3 million lbs.
There were 490.8 million lbs. of pork in cold storage, below stocks in November of 502.3 million pounds and nearly even with analyst estimates for 490.2 million lbs.
CME February lean hog futures were up 0.675 cent at 72.925 cents/lb. and most-active April hogs up 1.05 cents to 75.7, with each rising in part on technical buying after prices surpassed moving averages.
A drop in the dollar to the lowest since 2014 against a basket of currencies also made U.S. goods such as pork and beef comparatively cheaper in global markets.
CME March feeder cattle futures settled 0.575 cent lower at 146.4 cents/lb., with that contract hitting upside resistance at its 100-day moving average.
— Michael Hirtzer reports on commodity markets for Reuters from Chicago.