November 19, 2010

 

US cattle rises to 26-month high on export demand

 

 

US cattle futures jumped to a 26-month high on signs that overseas demand for US beef is climbing, while hogs gained the most in a week.

 

US exporters sold 19,344 tonnes of beef in the week ended November 11, up 49% from a week earlier, according to data from the Department of Agriculture. In the nine months ended September 30, US beef and veal exports rose 17% to GBP1.654 billion (US$750 million kilogrammes) from a year earlier, the latest government statistics show.

 

"The demand has been good domestically, and our export demand has been very good," said Lane Broadbent, a vice president of KIS Futures Inc. in Oklahoma City. "Demand is outstripping supply," she said.

 

Cattle futures for February delivery gained US$0.019, or 1.9%, to settle at US$1.045 a pound on the Chicago Mercantile Exchange. Earlier, the price reached US$1.0485, the highest since September 17, 2008. The commodity has climbed 21% this year.

 

Wholesale choice beef at midday was little changed at US$1.592 a pound after climbing yesterday to US$1.593, the highest since November 3.

 

The dollar declined against a basket of major currencies, boosting prospects for US meat exports. Cattle prices are reacting to a commodity-driven rally, Broadbent said.

 

Meatpackers processed 524,000 cattle in the first four days of this week, up 6.7 % from the same time last year, USDA data showed.

 

"You can see how these packers are still wanting to kill as many cattle as possible, because they're making money," Broadbent said.

 

Feeder-cattle futures for January settlement rose US$0.013, or 1.1%, to US$1.161 a pound.

 

Hog futures for February settlement climbed US$0.017, or 2.2%, to US$0.758 a pound, the biggest gain for a most-active contract since November 10. The price has advanced 16% this year.

 

Retail and export demand for pork boosted futures, said David Kruse, the president of CommStock Investments Inc. in Royal, Iowa. "There's hardly a commodity of any kind that's really priced as competitively as pork," he said.