Chicago | Reuters – Live cattle futures rallied on month-end short covering and position squaring on Wednesday, with the nearby contract hitting its highest price in almost eight months, traders said.
Front-month CME October live cattle settled up 1.950 cent at 115.850 cents per pound and reached its highest price since March 6. Most-active December cattle rose 0.150 cent to 116.950 cents.
February and April cattle ended slightly lower, and weakness in deferred contracts reflected large supplies in the market, said Larry Hicks, president of CattleHedging.com.
“I think everybody is a little bit too bulled,” Hicks said. “Unless weather takes tonnage away, we still have record cattle on feed.”
Ranchers have expanded their cattle herds over the past year to take advantage of low prices for crops used as feed.
There were 11.4 million cattle and calves being fed for slaughter as of Oct. 1, up 5 percent from a year earlier and the highest ever for that date since records began in 1996, according to the U.S. Department of Agriculture.
November feeder cattle gained 1.300 cent to 153.475 cents, while January feeders climbed 2.025 cents to 150.125.
In the hog market, futures stumbled.
CME December hogs closed 0.550 cent lower at 58.45 cents per pound. February hogs were down 1.625 cent at 65.325.
Shipments of U.S. pork to China have declined due to the trade war between Washington and Beijing. On Thursday, the USDA will issue weekly data on U.S. export sales.