Cattle futures rose for the third straight session, the longest rally in two weeks, on signs that improved demand from U.S. beef processors is tightening supplies of the animals. Hog prices advanced to a contract high.
Meatpackers processed 618,000 cattle in the week ended Oct. 26, up 0.2 percent from a week earlier, U.S. Department of Agriculture data show. Wholesale-beef prices are up 9.2 percent since the end of July, and cattle futures last week touched a nine-month high. The U.S. herd as of Jan. 1 was the smallest for that date since 1952 after last year’s drought destroyed pastures and forced ranchers to send animals to slaughter sooner than normal, according to the USDA.
“Meatpackers still want to buy cattle,” even after the rally in prices, Lane Broadbent, the president of KIS Futures Inc., said in a telephone interview from Oklahoma City. “Long-term, this supply issue is not going to get any better.”
Cattle futures for December delivery gained 0.6 percent to close at $1.338 a pound at 1 p.m. on the Chicago Mercantile Exchange, the longest rally since Oct. 14. Prices are up 11 percent since the end of May, and on Oct. 25 touched $1.347, the highest for a most-active contract since Jan. 15. Feeder-cattle futures for January settlement rose 0.5 percent to $1.66925 a pound, halting a three-session slump.
Beef exports climbed 3.3 percent to 1.69 billion pounds (767,777 metric tons) in the eight months through Aug. 31, compared with the same period a year earlier, according to the USDA. Wholesale beef fetched $2.0341 at midday today, the highest since June 6, government data show.
Hog futures for December settlement advanced 1.7 percent to 91.95 cents a pound on the CME, after touching 92.1 cents, the highest since the contract began trading in June 2012. Prices are up 6 percent this month.