Cattle futures bounced on Tuesday despite growing government supply forecasts.
Contracts for feeder cattle, which still have to be fattened before slaughter, rose to the highest close in over four months. October-dated futures at the Chicago Mercantile Exchange rose 1% to $1.55125 a pound, the highest close since June 6. October live cattle futures rose 1.9% to $1.13625 a pound.
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Prices have risen this week despite a report showing a larger-than-expected uptick in supplies of cattle going into feedlots for fattening. The U.S. Department of Agriculture said late last week that cattle placements in September rose 13% from a year earlier, well above expectations.
Analysts said that buying interest nevertheless picked up as trading patterns signaled to funds and other speculative investors that prices could move higher.
Livestock traders are focused on this week's cash market for slaughter-ready cattle, and expect to see steady to higher prices. Business for the week typically starts with the Fed Cattle Exchange on Wednesday morning. Some 900 head are listed this time around.
Cash prices last week averaged at $111 per 100 pounds live and $175 dressed.
Lean hog futures for December at the CME rose 0.8% to 64.025 cents a pound on Tuesday. Traders were unfazed by a separate government report released Monday afternoon showing a build-up in frozen pork stocks.
The USDA said that supplies of pork in commercial freezers rose 7% in September from a month earlier, with pork belly stocks--which have been depleted for much of this year--rising 9%.
Higher stocks come as meatpackers slaughter a record number of hogs. Competition among them to secure pigs has sparked higher cash prices, helping the futures market, but analysts said it could start to drag the market lower if that extra pork isn't consumed or exported fast enough.
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(END) Dow Jones Newswires
October 24, 2017 15:58 ET (19:58 GMT)