U.S. Cattle Futures Extend Gains on Hopes for Rebound in Demand
October 08 2015 - 04:11PM
Dow Jones News
By Kelsey Gee
CHICAGO--U.S. live-cattle futures settled sharply higher
Thursday, after surging by the exchange limit for two consecutive
sessions, settling at a 1 1/2-week high as investors bet that
demand for beef is likely to recover in the weeks ahead.
October cattle futures picked up 1.825 cents, or 1.4%, to
$1.31175 a pound at the Chicago Mercantile Exchange, the highest
closing price since Sept. 28. Most active December cattle futures
rose 1.525 cents to $1.37675 a pound. Feeder-cattle futures for
October recovered 2.925 cents to $1.87875 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 say is likely to
attract bargain buying. Narrow gains in the beef market reported
this week made some hopeful that cattle prices will soon turn a
corner, confirmed for some by a second day of higher beef prices on
Thursday.
The U.S. Department of Agriculture on 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.
Other traders covered short positions Thursday, betting that the
demand issues facing the cattle market are unlikely to worsen in
the weeks ahead.
Hog futures also settled higher, buoyed by buying across the
livestock markets.
October hog futures rose 0.175 cent, or 0.2%, to 74.00 cents a
pound, a two-month peak. December hogs also picked up 0.175 cent to
66.15 cents a pound.
Write to Kelsey Gee at kelsey.gee@wsj.com
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(END) Dow Jones Newswires
October 08, 2015 15:56 ET (19:56 GMT)
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