By Kelsey Gee 
 

CHICAGO--U.S. live-cattle futures reversed early session losses to advance Thursday, after surging by the exchange limit for two-consecutive sessions, as investors bet that demand for beef is likely to recover in the weeks ahead.

October cattle futures were up 0.5 cent, or 0.4%, to $1.2985 a pound at the Chicago Mercantile Exchange, the highest intraday prices in seven sessions. Most-active December cattle futures rose 0.6 cent to $1.3675 a pound. Feeder-cattle futures for October recovered 1.2 cents to $1.8615 a pound.

Fears about slack demand for pricy beef in the face of record pork and poultry production have dragged the cattle market sharply lower in recent weeks, to a level some investors suspect will attract bargain-buying. Narrow gains in the beef market reported this week made some hopeful that cattle prices will soon turn a corner, fueling aggressive buying on Tuesday and Wednesday. On Thursday, after a round of profit-taking pushed prices lower at the start of the session, traders refocused on signs of a steady demand recovery by midday, when the U.S. Department of Agriculture posted another modest uptick in the beef market.

USDA Thursday showed wholesale choice-grade beef prices climbing $1.39 to $204.97 per hundred pounds, the largest increase in weeks. Select-grade beef prices also increased, to $198.00 per hundred pounds. Investors seized on the move, which could further widen margins for beef processors, giving them more incentive to bid aggressively for cattle in the cash markets in the days ahead.

Hog futures also turned higher, buoyed by buying across the livestock markets. October hog futures were up 0.35 cent, or 0.5%, to 74.175 cents a pound. December hogs picked up 0.4 cent to 66.375 cents a pound.

Write to Kelsey Gee at kelsey.gee@wsj.com

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(END) Dow Jones Newswires

October 08, 2015 12:49 ET (16:49 GMT)