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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