Chicago | Reuters — U.S. live cattle futures gained for the second straight session on Tuesday, rising on short-covering and bull-spreading amid expectations for gains in cash cattle prices this week, traders and analysts said.
A rebound in stock markets following declines tied to Britain’s decision in a referendum last week to exit the European Union also underpinned cattle futures. Cattle sometimes move in tandem with equities as better returns can boost purchases of luxury goods such as steaks.
“The (live cattle) market has traded higher throughout the session, aided by the more positive tone in the markets and for commodities in general as fears about the Brexit wane, at least momentarily,” brokerage Brock + Associates said in a note to clients.
Retailers have stocked meat cases in advance of Monday’s U.S. Fourth of July holiday, which is one of the most popular days for grilling meat outdoors.
“We have a little window of good demand that is helping us off of our lows,” said Tim Hackbarth, broker at the Zaner Group.
Chicago Mercantile Exchange June live cattle saw the biggest gains, rising 1.15 cents to settle at 117.075 cents/lb., a 1-1/2-week high. Traders were exiting June positions ahead of the contract’s expiration on Thursday. Most-active August cattle was up 0.7 cent to 112.725 cents/lb.
Feeder cattle also extended recent gains, with both live and feeder cattle rebounding from multiyear lows reached last week. CME August feeders finished 0.5 cent higher at 140.675 cents/lb.
Hog futures were mostly higher, stabilizing after their three-week lows from Monday. Gains in wholesale pork prices helped to offset losses in cash hog prices. Most active August hogs were up 0.475 cent at 83.975 cents while front-month July hogs settled unchanged at 83.15.
The U.S. Department of Agriculture after the close of trading said the wholesale pork cutout rose $1.86, to $90.86/cwt, highest since August.
— Michael Hirtzer reports on agriculture and ag commodity markets for Reuters from Chicago.