Cattle Rise to Eight-Week High on Beef-Export Outlook; Hogs Extend Decline

Cattle futures rose, extending a rally to an eight-week high, on speculation that a decline in the dollar will boost demand for U.S. beef exports. Hogs fell for the fourth time in five sessions.

The dollar fell to a 10-week low against a basket of six major currencies. In May, U.S. beef exports jumped 27 percent from a year earlier, according to the most-recent government data. In July, cattle prices have climbed 3.9 percent, heading for the biggest monthly gain in a year.

“As the market watches the dollar slipping, it’s starting to fuel some confidence” in cattle, said Lawrence Kane, a market adviser at Stewart-Peterson Group in Elmwood, Illinois. “Exports are a slow-building process, and they need confidence that the dollar is stable.”

Cattle futures for October delivery advanced 0.175 cent, or 0.2 percent, to 93.575 cents a pound on the Chicago Mercantile Exchange. Earlier, the price reached 94 cents, the highest level for a most-active contract since May 14.

Feeder-cattle futures for August settlement slipped 0.25 cent, or 0.2 percent, to $1.13375 a pound.

U.S. beef exports totaled 203.55 million pounds in May, compared with 160.46 million a year earlier, U.S. Department of Agriculture data show.

U.S. meat processors are paying more for animals as demand grows. Slaughterhouses paid 93 cents a pound on average for steers for immediate delivery this week, up 1.3 percent from a week earlier and 12 percent more than a year earlier, USDA data show.

“The cash trade really picked up,” said Adam Stout, a risk-management consultant at FCStone Group Inc. in Kansas City, Missouri. “We went into the week expecting cash cattle to be steady to a little weaker, so these prices are pretty impressive.”

Hog futures for October settlement fell 0.475 cent, or 0.6 percent, to 75.325 cents a pound. The price has climbed 15 percent this year.

To contact the reporter on this story: Jennifer A. Johnson in Chicago at Jjohnson133@bloomberg.net

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