Cattle futures rose after a late surge in physical cattle prices last week.
Futures traders spent much of last week trying to anticipate how much meatpackers would pay feedyards for their cattle, with the two groups in a deadlock. When the trade finally kicked off on Friday afternoon, prices came in higher than expected. That sparked a bounce when futures markets reopened on Monday.
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Packers mostly paid around $127 per 100 pounds on a live basis, with dressed cattle--another way of pricing slaughter-ready herds--going for $200. Those prices were $4 or $5 higher than a week earlier.
Analysts said that tighter short-term supplies and steady beef demand helped move physical prices higher.
"The continued need to own cattle inventory to keep beef processing plants operating at optimum levels and feedlots being extremely current on market ready fed cattle supplies is supporting the market for the time being," said Troy Vetterkind, of Vetterkind Cattle Brokerage. "This could remain the case for another week or two."
Live cattle futures for February rose 0.9% to $1.257 a pound at the Chicago Mercantile Exchange, touching the highest point since early November.
Some traders shrugged off a government supply report, also released late Friday. The U.S. Department of Agriculture said that feedyard operators placed 1% more cattle in their lots in December than a year earlier, whereas analysts had on average expected that figure to fall.
The higher-than-expected placement number suggested that supplies would grow in the months to come as the newly placed cattle reached their requisite slaughter weights.
Futures for feeder cattle, younger animals which haven't been fattened yet, were mixed. CME March contracts rose 0.2% to $1.47 a pound, while later-month futures fell.
Hog futures were mixed. Cash prices for physical hogs fell on Thursday and Friday last week and were expected steady to lower again on Monday. Wholesale pork prices were mixed, falling 66 cents to $82.15 per 100 pounds as of midday.
CME February lean hog futures rose 0.2% to 72.4 cents a pound.
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(END) Dow Jones Newswires
January 29, 2018 15:28 ET (20:28 GMT)