Chicago | Reuters — U.S. live cattle futures reached a contract high on Wednesday on expectations that wintry weather would hamper the movement of cattle to slaughterhouses.
Two winter storms blasted parts of the United States, after parts of Colorado got up to 30 inches of snow on Tuesday.
The storms could disrupt transportation and possibly curb the ability of cattle to gain weight in feedlots, where they are fattened prior to slaughter, analysts said.
“This week’s snow storm in Nebraska is respectable,” said Rich Nelson, chief strategist for broker Allendale. “We will disrupt finishing schedules.”
February live cattle futures on the Chicago Mercantile Exchange (CME) set a contract high of 127 cents/lb. (all figures US$). The contract settled up 1.025 cents at 126.7 cents/lb. Front-month December reached its highest price since April before ending up 1.025 cents at 121.425 cents.
CME January feeder cattle futures jumped 1.7 cents, to 143.325 cents/lb.
CME lean hog futures stumbled amid weakness in the cash market. Benchmark February lean hogs closed down 0.675 cent at 67.15.
Pork producers are hoping China will ramp up buying from the United States as it grapples with a devastating outbreak of a fatal pig disease that has decimated its herd. However, U.S. hog supplies are massive.
Packers slaughtered an estimated 486,000 pigs on Wednesday, up from 479,000 pigs a year earlier, according to U.S. Department of Agriculture data.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.