Chicago | Reuters — Chicago Mercantile Exchange lean hog and live cattle futures climbed to their highest prices in about seven months on Monday.
Pushing cattle futures higher was optimism that cash prices will improve this week, traders said. Fed cattle in Texas and Kansas stayed mostly steady last week at about $111/cwt in the cash market (all figures US$).
Rains and muddy conditions in the Farm Belt helped support gains by fueling concerns that cattle may not add weight as fast as normal, said Don Roose, president of Iowa-based broker U.S. Commodities.
“It’s just not conducive to efficient rate of gains,” Roose said.
CME October live cattle futures settled up 0.375 cent at 114.175 cents/lb., after the contract reached its highest price since March 14. Most active December gained 0.1 cent to close at 118.25 cents.
CME October feeder cattle slipped 0.1 cent at 157.675 cents/lb. Deferred contract months ended higher.
Large supplies are looming over cattle and hog futures, after U.S. ranchers expanded herds to take advantage of low prices for feed grains. However, demand is also strong.
The U.S. Meat Export Federation, a trade group, said on Monday that the value of American beef exports in August topped $750 million for the first time. Beef exports in August totaled 119,850 tonnes, up seven per cent from a year earlier, according to the group.
August pork exports were fairly steady with last year’s volume, according to the U.S. Meat Export Federation.
Beijing has imposed tariffs on imports of U.S. pork as part of the ongoing U.S.-China trade dispute, hurting American pork exports to China.
“The retaliatory duties are a clearly a significant obstacle,” said Dan Halstrom, president of the U.S. Meat Export Federation.
CME October hogs reached a session high of 69.125 cents/lb., the contract’s highest price since March 16, before paring gains. It ended up 0.25 cent/lb. at 68.45 cents. December hogs were flat at 57.55 cents/lb.
The market has rebounded about 40 per cent since the front-month contract neared a two-year low on Aug. 30.
On Thursday, livestock traders will digest a U.S. Department of Agriculture supply and demand report that will provide an update on supplies of U.S. corn and soy. The crops are used to feed animals, and increased supplies could make it less expensive to produce livestock.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.