Feeder-cattle futures were little changed after rising to a record on concern that U.S. ranchers are holding animals longer as pastures rebound from a drought and cheaper grain spurs demand from feedlots. Hogs fell.
The U.S. High Plains Regional Climate Center reported that drought conditions have eased after damaging pastures last year and forcing ranchers to sell cattle to feedlots sooner than normal. Today, the price of corn, the main grain ingredient, touched a three-year low, improving the profitability for feedlots to buy young animals to fatten for slaughter.
“Weather conditions have been much better than last year,” Dan Vaught, an economist at Doane Advisory Services in St. Louis, said in a telephone interview. “Producers have incentive to hold younger cattle longer.”
Feeder-cattle futures for November settlement fell less than 0.1 percent to $1.692 a pound at 12:03 p.m. on the Chicago Mercantile Exchange. Earlier, the price reached $1.6995, the all-time high for the most-active contract. The commodity climbed to an all-time high for the third straight session.
Feedlot operators typically buy 1-year-old cattle that weight 500 pounds (227 kilograms) to 800 pounds, called feeders, which are fattened on corn until they weigh about 1,300 pounds and are sold to meatpackers.
Cattle futures for December delivery increased 0.3 percent to $1.32925 a pound. Earlier, the price reached $1.3295, the highest since Feb. 4.
Hog futures for December settlement fell 0.4 percent to 86.175 cents a pound.
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