Cattle futures rose to a four-month high on speculation that surging feed costs will force ranchers to cull herds, cutting the outlook for meat supply. Hogs gained.
The price of corn, the main ingredient in livestock feed, advanced 52 percent from mid-June through yesterday. As feed costs increase, cattle producers may sell their animals rather than pay more to fatten them for slaughter, said Lane Broadbent, a vice president at KIS Futures Inc. in Oklahoma City.
“It makes no sense for them to keep feeding cattle, so longer-term the question is, will they have less tonnage on the market,” Broadbent said by telephone.
Cattle futures for October delivery jumped 2.4 percent to settle at $1.22825 a pound at 1 p.m. on the Chicago Mercantile Exchange. The price earlier rose by the exchange limit of 3 cents to $1.22975, the highest since March 19.
Feeder-cattle futures for August settlement climbed by the exchange limit of 3 cents, or 2.2 percent, to $1.372 a pound in Chicago.
Hog futures for October settlement rose 3.1 percent to 80.05 cents a pound on the CME, the biggest gain since May 31. The price of wholesale pork rose 1.4 percent yesterday, the first gain since June 27.