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Cattle Prices Rise on Concern for Tighter Beef Supply; Hogs Gain

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.

To contact the reporter on this story: Dalton Barker in Chicago at dbarker40@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

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