Cattle rise as meatpacker demand outpaces supply, hogs climb
Sunday, 23 May 2010
NEW YORK, May 22 (Bloomberg): Cattle futures rose for the first time in three days on speculation that US meatpacker demand for animals is outpacing available supplies. Hogs rebounded from an eight-week low.
The US feedlot herd was 3.4 per cent smaller on May 1 than a year earlier, the Department of Agriculture said today after markets closed in Chicago. By tomorrow, meatpackers will have processed an estimated 12.9 million head of cattle this year, 1.2 per cent more than a year earlier. Wholesale-beef prices have surged 21 per cent this year as herds shrank and demand rebounded, boosting meatpacker profits.
"We continue to kill as many or more cattle as a year ago, with fewer cattle on feed," said David Kruse, a commodity trading adviser at CommStock Investments Inc. in Royal, Iowa. "Packer margins are still excellent," spurring processors to slaughter cattle earlier at lighter weights, he said.
Cattle futures for August delivery rose 0.15 cent, or 0.2 per cent, to 90.625 cents a pound on the Chicago Mercantile Exchange. Prices were down 1.5 per cent for the week, the second straight weekly drop, on concern that meat demand will shrink as the global economy falters.
Feeder-cattle futures for August settlement declined 0.275 cent to $1.1015 a pound. The price earlier fell to $1.09425, the lowest level for a most-active contract since March 29.
Feedlots bought 1.629 million young cattle last month, up 1.8 per cent from a year earlier. Twelve analysts in a Bloomberg News survey expected a 2.3 per cent increase, on average.
The US feedlot herd was 3.4 per cent smaller on May 1 than a year earlier, the Department of Agriculture said today after markets closed in Chicago. By tomorrow, meatpackers will have processed an estimated 12.9 million head of cattle this year, 1.2 per cent more than a year earlier. Wholesale-beef prices have surged 21 per cent this year as herds shrank and demand rebounded, boosting meatpacker profits.
"We continue to kill as many or more cattle as a year ago, with fewer cattle on feed," said David Kruse, a commodity trading adviser at CommStock Investments Inc. in Royal, Iowa. "Packer margins are still excellent," spurring processors to slaughter cattle earlier at lighter weights, he said.
Cattle futures for August delivery rose 0.15 cent, or 0.2 per cent, to 90.625 cents a pound on the Chicago Mercantile Exchange. Prices were down 1.5 per cent for the week, the second straight weekly drop, on concern that meat demand will shrink as the global economy falters.
Feeder-cattle futures for August settlement declined 0.275 cent to $1.1015 a pound. The price earlier fell to $1.09425, the lowest level for a most-active contract since March 29.
Feedlots bought 1.629 million young cattle last month, up 1.8 per cent from a year earlier. Twelve analysts in a Bloomberg News survey expected a 2.3 per cent increase, on average.