Chicago | Reuters — Chicago Mercantile Exchange feeder cattle futures hit new all-time highs in the nearby contracts on Monday, as bidding wars continue to rally cash prices as more producers show interest in expanding their herds, traders said.
The rally helped give a boost to the pork market, where CME April lean hogs ended up 0.125 cent at 71.875 cents/lb., while most-active June lean hogs rose 1.3 cent at 88.175 cents/lb.
Tight U.S. cattle supplies have been rallying cash prices for weeks, as some cattle producers are gambling on fat profits by putting more animals on pasture this spring, traders said.
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As supplies are expected to decline further in the second half of the year, investors on Monday shrugged off a rally in corn futures to further push for new price peaks in the cattle market, said Dan Norcini, an independent livestock trader.
Most-active May feeder cattle hit a contract high of 210.85 cents/lb. on the day, before settling up 2.85 cents at 210.75 cents/lb.
April feeder cattle also settled up 2.15 cents at 205.55 cents/lb. — after touching a contract high of 205.9 cents/lb. in midday trading.
That cash market rally is expected to continue, analysts said. Strong demand opened up the feeder cattle cash market on Monday in the Oklahoma City area, traders said, with prices rising particularly for heifer calves.
“To me, that’s an indication that people are thinking they need to start rebuilding this herd, even though feed prices are high,” Norcini said.
Beef production was 502.8 million lbs. for the week ending April 15, down five per cent from a year earlier, according to U.S. Department of Agriculture estimates published on the agency’s website Friday.
April live cattle futures ended up one cent at 175.75 cents/lb., while June live cattle finished up 1.15 cents at 164.875 cents.
— P.J. Huffstutter reports on agriculture and agribusiness for Reuters from Chicago.
