Chicago | Reuters — U.S. live cattle futures jumped to contract highs on Tuesday as traders worried about snow and cold temperatures slowing shipments of livestock to processing plants.
Lean hog futures also rose in a turnaround from a slide to contract lows last week.
Traders focused on the wintry weather as forecasters predicted more snow will fall across portions of the U.S. Plains and Midwest this week.
Snow and cold already hampered transportation in recent days and slowed weight gain in cattle herds, which consume feed to generate body heat.
“As long as the weather is restricting things, there is going to be pretty good support,” said Matt Wiegand, a risk management consultant and commodity broker for FuturesOne.
Most-active Chicago Mercantile Exchange April live cattle advanced 0.7 cent to 129.925 cents/lb. and set a contract high of 130 cents/lb. (all figures US$). March feeder cattle futures gained 0.95 cent to 143.45 cents/lb.
CME April lean hogs, the front-month and most actively traded contract, rallied 1.825 cents to 55.725 cents/lb.
Wholesale pork prices, known as the cutout, also edged higher. The carcass value was $60.96/cwt, up from $60.92 on Monday and $59.01 on Friday, according to U.S. Department of Agriculture data.
“You’re not seeing a lot of hogs make it into town with the conditions that we have seen out there,” Wiegand said.
The hog market was oversold after the April contract dropped to a low of 52.25 cents/lb. on Jan. 20, traders said. Short-covering helped lift prices, they said.
“You’ve got that market low enough that you are going to see some bottom pickers,” a broker said.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.