May 6, 2010

Cattle futures rose to a 19-month high as surging wholesale beef and spot-market prices in the US signalled increasing meat demand whereas hogs fell the most in three months.

Wholesale choice beef climbed to US$1.713 a pound at midday, the highest level since July 2008, according to government data. Spot-market steers in Texas, sold at about 3% premium to June futures in Chicago. Cattle weights have declined, reducing overall beef supplies.

Cattle futures for June delivery rose US$0.0675, or 0.7%, to US$0.967 per pound on the Chicago Mercantile Exchange. Earlier, the price climbed to US$0.972, the highest level since October 3, 2008. Cattle prices have climbed 18% in 2009.

Hog futures for June settlement fell US$0.2275, or 2.6%, to US$0.8448 a pound, the biggest drop since February. Futures still have gained 30% last year as financial losses spurred producers to cut herds and pork demand rebounded following the swine-flu outbreak.

The dollar jumped to the highest in a year against a basket of major currencies, including the euro and yen. A higher dollar may erode the appeal of US pork exports, which increased 1.9% from December-February 28.

Wholesale pork declined 0.1% yesterday to US$0.9036 a pound, according to the USDA. Prices are still up 65% in 2009, and touched a 20-month high on April 26.