Cattle futures rose to a two-week high on signs of increasing demand for U.S. beef. Hog prices also climbed.
In the week ended March 21, export sales of beef were 17,340 metric tons (38.2 million pounds), 29 percent more than the four-week average, U.S. Department of Agriculture data showed today. The domestic feedlot herd totaled 10.857 million head as of March 1, down 7 percent from a year earlier, the agency said on March 22.
“Meatpackers are in a position where they need to buy cattle,” Lane Broadbent, a vice president at KIS Futures Inc. in Oklahoma City, said in a telephone interview. “They think demand is going to show up. Our supplies are still very tight.”
Cattle futures for June delivery climbed 1.1 percent to settle at $1.24375 a pound at 1 p.m. on the Chicago Mercantile Exchange. After the close, the price reached $1.24475, the highest for a most-active contract since March 13. The commodity has dropped 6 percent this year.
Feeder cattle surged the most in eight months following a plunge in the price of corn, the main ingredient in livestock feed.
On the CME, feeder-cattle futures for May settlement rose by the exchange limit of 3 cents to $1.45075 a pound, the highest since March 13. The 2.1 percent gain was the largest since July 18.
Corn futures in Chicago fell the most in 10 months after the USDA said domestic inventories were bigger than analysts forecast and that farmers will plant the most since 1936.
The cheaper feed costs “certainly creates optimism for the feedlot operator,” said Lawrence Kane, a market adviser at Stewart-Peterson Group in Yates City, Illinois.
Corn futures for May delivery tumbled 5.4 percent to $6.9525 a bushel on the Chicago Board of Trade, the biggest drop since May 22.
Hog futures for June settlement increased 0.4 percent to 91.075 cents a pound on the CME. The price has climbed 6.2 percent this year.