Cattle Rise as `Extreme' Hot U.S. Weather May Curb Beef Supply; Hogs Gain

Cattle futures climbed to a nine- week high on speculation that U.S. beef supplies will be limited by unusually hot weather that killed some animals and threatened to halt weight gains for the feedlot herd. Hogs also rose.

The Kansas Livestock Association has reported cattle deaths from “extreme temperatures.” Heat indexes in parts of Kansas, the third-largest producing state, Oklahoma and Missouri may reach as high as 110 degrees Fahrenheit (43 degrees Celsius) today, according to the National Weather Service.

“There were those limited deaths in Kansas, but the bigger deal is the impact on potential weight gains for cattle in the feedlots,” said Rich Nelson, the director of research at Allendale Inc. in McHenry, Illinois.

Cattle futures for October delivery rose 0.425 cent, or 0.4 percent, to 94.925 cents a pound on the Chicago Mercantile Exchange, after touching 95.025 cents, the highest level for a most-active contract since May 13. Feeder-cattle futures for August settlement increased 0.175 cent to $1.1465 a pound.

Steers in the U.S. weighed an average 1,327 pounds (602 kilograms) at slaughter in the first two days of this week, 3.6 percent less than in the same period a week earlier, U.S. Department of Agriculture data show.

Heat-related cattle deaths have occurred since about July 16, primarily in central and western Kansas, said Todd Domer, a spokesman for the Kansas Livestock Association, a Topeka-based trade group. He declined to speculate on the number of animals killed.

Humidity, Little Wind

“We’ve talked to our members, and we’ve heard everything from losses of one or two, on up to 1 percent of their inventory,” Domer said. “I don’t remember the last time that we had anything like this. It’s not just the temperatures, because those cattle can handle extreme temperatures if they don’t have to experience the high humidity and low wind speeds we’ve had.”

Cattle also gained as wholesale choice-beef prices climbed to $1.5562 a pound at midday, the highest level since July 7, according to the USDA.

Hog futures for October settlement rose 1.125 cents, 1.5 percent, to 75.625 cents a pound on the CME. The most-active contract is up 30 percent in the past year.

Futures were supported after wholesale pork jumped 1.7 percent yesterday to 82.82 cents a pound, the highest level since July 12.

“We’ve got a slightly better supply situation in front of us,” Allendale’s Nelson said. “The last hogs and pigs report said there should be a slight shortfall in hogs in late summer to early fall, and we’re reaching those periods right now.”

To contact the reporter on this story: Whitney McFerron in Chicago at wmcferron1@bloomberg.net.

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