Cattle futures rose for the first time in three days on signs that beef demand is increasing as importers boost purchases and U.S. grocers stock up for summer grilling. Hogs dropped.
U.S. exporters sold 14,710 metric tons of beef the week ended June 17, up 42 percent from a week earlier, the Department of Agriculture said today. U.S. demand may rise for the Independence Day holiday on July 4, when many consumers grill outdoors. Inventories at the end of May were 13 percent smaller than a year earlier, the USDA said on June 22.
“We had good export sales on cattle, well above a year ago,” said Christian Mayer, a market adviser at Northstar Commodity Investment Co. in Minneapolis. “And people may buy a lot of product for the Fourth of July. We’ll see a lot of sales in stores.”
Cattle futures for August delivery rose 0.65 cent, or 0.7 percent, to 89.15 cents a pound on the Chicago Mercantile Exchange. The price dropped 0.9 percent in the previous two days. The commodity has climbed 8.1 percent in the past 12 months.
Feeder-cattle futures for August settlement gained 0.775 cent, or 0.7 percent, to $1.12675 a pound.
Cattle futures earlier dropped as much as 0.3 percent as the Standard & Poor’s 500 Index fell for the fourth straight day on Greek-debt concerns.
Cattle are “still shook up about the stock market,” said Lane Broadbent, a vice president at KIS Futures Inc. in Oklahoma City. “The stock market has been a big driver lately, and there is still a lot of uncertainty.”
Hog futures for August settlement fell 0.975 cent, or 1.2 percent, to 83.25 cents a pound. Earlier, the price rose as much as 0.5 percent. The most-active contract has gained 42 percent in the past year as U.S. producers cut herds.
Wholesale pork prices dropped 0.6 percent yesterday to 83.8 cents a pound, according to the USDA.
Futures may rebound because the USDA is expected to report tomorrow that the U.S. hog herd is shrinking, Northstar’s Mayer said. The breeding herd may have been 3.5 percent smaller on June 1 than a year earlier, according to the average estimate of 11 analysts in a Bloomberg News survey.
“We’ve got the hog and pig report on Friday afternoon, and people are jockeying to figure out what position to take,” Mayer said.
Farmers slashed herds after losing $6 billion from late 2007 to early 2010 as the recession and swine-flu concerns eroded pork demand, according to University of Missouri estimates.