U.S. livestock: Cold weather pushes cattle futures to new highs

Chicago | Reuters — U.S. live cattle futures roared to new contract highs on Friday, supported by worries about cold weather limiting weight gain in herds.

Most-active April cattle touched a contract high of 130.45 cents/lb., topping its previous high of 130.1 on Wednesday (all figures US$). June cattle also touched a high for the fifth consecutive session at 121.05 cents/lb.

Helping to push prices higher were cold temperatures in the U.S. Plains and Midwest, traders said. Cattle typically do not put on weight as quickly in cold weather because they consume feed to generate body heat.

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“Some of these guys (cattle producers) are telling me this is the worst weather they’ve seen in a long, long time,” said Jason Britt, president of broker Central States Commodities in Kansas City, Missouri.

Traders were adjusting positions on the first day of March, with some rolling positions out of the nearby April futures contract and into the June, August and October contract months, a Chicago-based trader said.

Most-active Chicago Mercantile Exchange April live cattle settled down 0.3 cent at 129.55 cents per pound. June live cattle ended up 0.275 cent at 120.425 cents/lb.

The temporary move above 121 cents/lb. in June futures triggered some hedging in the market, Britt said.

“As you’ve got more guys willing to step in and hedge, you might get more two-sided action,” he said.

Farmers who feed cattle also were taking positions in the Chicago Board of Trade corn market to lock in grain supplies after corn futures dropped to a three-month low this week, Britt said.

CME March feeder cattle futures lost 1.65 cents to 141.225 cents/lb. April feeder cattle futures slid 1.1 cents to 145.05 cents/lb.

CME April lean hogs, the front-month and most actively traded contract, rose 0.525 cent to 56.4 cents/lb. The contract has recovered slightly since hitting a low of 52.25 cents last week on concerns about large hog herds and low pork prices.

— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.

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