U.S. Cattle Futures Bound Higher on Fund Bets; Hogs Rise

By Jacob Bunge Features Dow Jones Newswires

Cattle futures prices bounded higher on bets that rising beef prices won't soften consumer and export demand. Hog futures also climbed.

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Live cattle futures at the Chicago Mercantile Exchange closed Thursday at their highest level since Aug. 4, resuming a rally that has pushed contracts 9% higher since markets opened at the beginning of the week. December-dated live cattle futures settled 1.4% higher at $1.207 a pound.

There have been few signals so far this week that meatpackers are paying substantially higher prices to secure cattle in U.S. Plains States.

But investment funds and other traders have continued speculation on higher cattle prices to come, even as U.S. herd sizes continue to swell. Open interest in cattle contracts, a measure of the standing positions held in the market, has been on the rise.

"There is a lot of fund activity," said Tom Leffler, head of Augusta, Kansas-based Leffler Commodities LLC.

Mr. Leffler pointed out recent gains in wholesale beef prices, suggesting that meat processors may be charging more as they prepare to pay up for cattle. The price for 100 pounds of choice beef on Thursday climbed $2.25, to $202.46, after earlier this week rising above the $200 mark for the first time since early August.

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Questions remain among analysts as to whether demand for U.S. beef can keep up with expanding supplies. While beef exports declined last week, an increase in new sales were reported, according to the U.S. Department of Agriculture.

Hog futures settled higher Thursday, despite signs of cooling prices in the cash market, where prices were seen steady to slightly lower. December-dated contracts closed nearly 1% higher at 65.05 cents a pound, the highest level since mid-August.

Write to Jacob Bunge at jacob.bunge@wsj.com

(END) Dow Jones Newswires

October 26, 2017 15:21 ET (19:21 GMT)