Cattle futures rose for the second time in three sessions on mounting concern that U.S. beef output is dropping as demand increases. Hog prices increased.
Beef output probably will drop 6 percent next year and 2 percent to 3 percent in 2015, David Anderson, a Texas A&M University economist said Oct. 22 at a conference in Chicago. The U.S. Department of Agriculture forecast last month that production this year will fall 1.2 percent to the lowest since 2005. Wholesale-beef prices this year averaged $1.94 a pound, the highest on record going back to 2004, USDA data show.
“The fear of tighter supplies is the real flame under this market,” Lawrence Kane, a market adviser at Stewart-Peterson Group in Yates City, Illinois, said in a telephone interview.
Cattle futures for December delivery rose 0.2 percent to $1.3305 a pound at 10:44 a.m. on the Chicago Mercantile Exchange. Prices are up 0.8 percent since Oct. 18, heading for the biggest weekly gain this month. Feeder-cattle futures for January settlement declined 0.3 percent to $1.6715 a pound.
Hog futures for December settlement increased 0.8 percent to 88.85 cents a pound on the CME, after touching 89.35 cents, the highest since Oct. 17.
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