Chicago | Reuters — U.S. feeder cattle futures gained one per cent and live cattle futures were narrowly higher on Thursday amid rising demand for animals, especially for grazing, traders and analysts said.
Greening pastures in the Plains region boosted demand for lighter-weight cattle to feed on grass, with beef packers aggressively buying slaughter-weight cattle earlier this week amid big profit margins and high beef prices.
Chicago Mercantile Exchange April feeder cattle futures settled 1.85 cents higher at 124.625 cents/lb., highest in a week (all figures US$). More actively traded CME April live cattle finished 0.525 cent higher at 116.5 cents.
Weakening prices for corn also bolstered feeder cattle, as cheaper feed reduces costs for fattening cattle. Chicago Board of Trade corn hit a roughly five-week low on expectations for big harvests in South America.
“You start getting grass demand as well as feedlot demand,” Tommy Beall, president of Beall Consulting Group, said of the gains in feeder cattle.
Grazing cattle prices were as much as $5/cwt higher at a cash auction in Dodge City, Kansas, according to the U.S. Department of Agriculture on Wednesday. “Trade moderate, demand moderate, very good for cattle suited for a grazing,” USDA said.
Fast-moving wildfires have burned nearly two million acres in Texas, Oklahoma and Kansas, killed six people and left thousands of cattle dead, officials said. However, the fires had minimal impact on livestock futures, traders said. There are nearly 94 million cattle in the U.S., according to USDA.
CME lean hog futures were lower, pressured by technical selling and long liquidation following gains on Tuesday and Wednesday. CME April hog futures settled 0.35 cent lower at 68.075 cents/lb.
After the close of trading, USDA said hogs in the top market of Iowa and southern Minnesota were 85 cents lower at $67.76/cwt.
— Michael Hirtzer reports on commodity markets for Reuters from Chicago.