--Cattle futures climb on higher cash market expectations
--Persistent tightness of cattle supplies supportive to live,
feeder-cattle futures
--Hog futures up on buying across livestock markets
By Kelsey Gee
CHICAGO--U.S. cattle futures continued to climb early in the
session Friday, rallying to catch up to recent cash market prices
as processors bid aggressively for tight supplies of available
animals.
October live-cattle futures have trimmed gains from the start of
the session, recently advancing 1.6 cents to $1.5865 a pound at the
Chicago Mercantile Exchange. Most-active feeder-cattle futures for
October gained 1.275 cent to $2.23275 a pound.
Cattle futures for two consecutive days have rallied up to the
exchange-imposed daily limit of three cents during the trading
session, as traders assessed the supply outlook for the nation's
cattle herd. An increase in cattle placements into commercial
feedyards this spring led some market watchers to believe supplies
of fattened, slaughter-ready animals would expand during August and
September, though numbers have remained tight in recent weeks.
"Slaughter numbers [of cattle processed for beef] have been down
ten or eleven percent this summer" reflecting the slower pace of
sales from the feedyard to beef processors, said Altin Kalo, an
economist with food-industry advisory firm Steiner Consulting Group
in Manchester, N.H. "Feedlots are holding on to what [cattle] they
have trying to get the most money they can out of them because they
know that come winter there will be even fewer cattle available"
for them to buy, added Mr. Kalo.
The small pool of calves and light-weight animals is a
reflection of years of drought in the central U.S. that caused many
ranchers to thin herds rather than pay record expensive prices for
feed grains. Ahead of this year's grain harvest, which is predicted
to be record large for a second year, some producers are thought to
be retaining female breeding animals to expand herds, rather than
marketing them for sale to be fattened for slaughter.
Hog futures are getting a lift from buying across the livestock
markets and short-covering, after news of a novel vaccine for a
deadly swine virus sent prices tumbling.
October hog futures recently advanced 2.27 cents to $1.0492
cents a pound. February hog futures are up 0.1 cent to 89.15 cents
a pound.
Write to Kelsey Gee at kelsey.gee@wsj.com
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