November 23, 2010

US cattle prices drop and hogs remain steady
 

US cattle futures decreased after a government report indicated that US feedlots increased purchases of young animals in October, symbolising increased supplies for meatpackers whereas hogs changed little.

Feedlots purchased 2.504 million head of cattle in the previous month. This is an increase of 1.2% from last October, the USDA said after Chicago markets closed on November 19. The total feedlot herd rose by 3.2% in contrast to last year, the USDA said.

"The cattle-on-feed feed report was mostly neutral and maybe slightly bearish due to the increase in October placements, and the overall increase in the cattle-on-feed population," said an analyst.

Cattle futures for February delivery declined by US$0.0043, or 0.4%, to stay at US$1.05 a pound on the CME. The commodity has risen by 21% this year.

The dollar increased for the first time in four sessions against a basket of six leading currencies, eroding the investment appeal of some raw materials and demand for US meat exports. The Thomson Reuters/Jefferies CRB Index of 19 commodities fell as much as 1.1% yesterday. The Standard & Poor's 500 Index also increased.

Feeder-cattle futures for January settlement remained the same at US$1.17 a pound.

Hog futures for February settlement acquired US$0.00075 to stop at US$0.7693 a pound on the CME. Earlier, the price hit US$0.7768, the most since September 21. The commodity has increased by 17% this year.

Tyson Foods Inc., the biggest US meat processor, reported fiscal fourth-quarter profit that was more than analysts' estimates as pork sales increased by 30%. Beef sales gained 1%, Tyson Foods Inc. said recently.