US cattle rise as tight supplies boost beef prices

 

 

Cattle futures rose for a fifth straight session, touching the highest price in more than a week, on speculation that declining supplies are spurring a surge in US beef prices.

 

Wholesale choice beef climbed 0.7% at midday to US$1.5354 a pound, the highest price since April 22, according to USDA figures. Beef supplies are diminishing after cold, wet weather slowed animal weight-gains, and producers cut herds to curb losses.

 

"The cattle side is getting an encouraging push" from beef prices, said Chad Henderson, a market analyst at Prime Agricultural Consultants Inc. in Brookfield, Wisconsin. "It's giving optimism to the cash-cattle market that last week's sharply higher trade was justified."

 

Cattle futures for June delivery advanced 0.35 cent, or 0.4%, to 93.975 cents a pound on the Chicago Mercantile Exchange, after touching 94.075 cents, the highest price for a most-active contract since March 8. The price climbed 2.1% in the previous four sessions.

 

Feeder-cattle futures for May settlement gained 0.35 cent, or 0.3%, to US$1.0735 a pound.

 

Cattle purchases by feedlot managers fell 1.7% last month from a year earlier, to 1.649 million animals, the average estimate of 12 analysts in a Bloomberg News survey. Buying slowed as snow and rain muddied feed pens across the Great Plains, the analysts said.

 

In bad weather, cattle can spend more energy moving through mud, reducing weight gain. Lighter cattle yield less beef. The USDA will release its monthly feedlot estimates on March 19.

 

Cattle futures also climbed as commodities and US equities gained, raising speculation that meat demand will increase as the economy expands. The Reuters/Jefferies CRB Index of 19 raw materials rose for a second straight day, and the Standard & Poor's 500 Index is up more than 5% this month.

 

Meanwhile, hog futures for June settlement slipped 0.075 cent, or 0.1%, to 81.025 cents a pound on the CME. The most-active contract has climbed 9.4% in the past year.

 

Wholesale pork dropped 1.3% to 73.08 cents a pound, the lowest price since February 25, according to the USDA.

 

Declines in hogs may have been tempered by speculation that US pork shipments to Russia will resume soon, after the government in Moscow eased bans on US meat last week, said Dave Bauer, the president of Brite Futures Inc. in Milwaukee.

 

Exports are expected to resume within a week, USDA secretary Tom Vilsack said yesterday. Russia, once the fourth- largest importer of US pork, imposed restrictions last year after traces of prohibited antibiotics were found in shipments.