Cattle futures rose for the eighth straight session, capping their longest rally since November 2008, on mounting concern that U.S. herds are shrinking as demand for exported beef increases.
Feedlots had 7.2 percent fewer cattle being fattened for slaughter on Sept. 1 than a year earlier, a U.S. Department of Agriculture report on Sept. 20 showed. Exports of beef during the first seven months of 2013 were up 2.8 percent from a year earlier, USDA data show. Cattle futures have jumped 12 percent since touching a 10-month low in May.
“The feed report really catapulted prices higher,” Lane Broadbent, the vice president of Kis Futures Inc. in Oklahoma City, Oklahoma, said in a telephone interview. This week’s rally is “based off the assumption that our supplies are going to get tighter and tighter,” he said.
Cattle futures for December delivery rose 0.4 percent to close at $1.32075 a pound at 1 p.m. on the Chicago Mercantile Exchange, ending the week up 1.8 percent. Prices have rallied 4.2 percent in September, heading for the biggest monthly advance since May 2012.
As of Jan. 1, the cattle herd was at the smallest since 1952 after the worst drought since the 1930s parched pasture lands and forced ranchers to send more animals to be slaughtered. Feedlots lost about $52 a head on average in August, according to Rich Nelson, chief strategist at Allendale Inc. in McHenry, Illinois.
Feeder-cattle futures for November settlement slid 0.1 percent to $1.64925 a pound on the CME.
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