--Cattle futures climb on cash market expectations
--Tight supplies drive feeder-cattle futures to fresh intraday
peaks
--Hog futures lifted by buying across livestock markets
By Kelsey Gee
CHICAGO--U.S. cattle futures are rising early in the session
Tuesday, following a sharp drop the prior session as traders assess
the supply outlook for market-ready animals in the months ahead.
Feeder-cattle futures, meanwhile, are climbing to fresh all-time
highs as the herd remains historically small.
October live-cattle are up one cent at $1.59525 a pound at the
Chicago Mercantile Exchange. Feeder-cattle futures for October
recently gained 1.35 cents to $2.2850 a pound, a fresh intrasession
peak.
"There's enough demand on an export basis to keep beef moving,
which has led people to expect higher prices will be paid for
cattle this week," said Brian Hoops, president of brokerage Midwest
Market Solutions in Springfield, Mo.
If retailers and export buyers are willing to pay historically
lofty prices for wholesale beef items, processors have more
incentive to bid aggressively for cattle in the cash markets. Last
week, prices for cattle surged as feedlot operators slowed the pace
of sales, as they face record-high costs for replacement
feeder-cattle.
However, while export buyers continue to pay record prices for
beef and pork, volumes have dropped slightly, according to federal
data.
Red meat exports from the U.S. dropped in July, according to the
U.S. Department of Agriculture, for the first year-over-year
decline in volume for both beef and pork in 2014. July beef exports
slipped 15% to 101.8 metric tons, while pork shipments fell 3% to
173.3 metric tons, as wholesale prices surged to all-time records
amid supply constraints due to drought and disease.
The feeder-cattle market remains underpinned by a sharp drop in
the cost of staple feed ingredients like corn, which can free up
cash for feedyard operators to fill yards with more lightweight
animals.
Hog futures are also rising after a jump in wholesale pork
prices, also supported by buying across the livestock markets.
October hog futures recently advanced 1.45 cents to $1.0452 cents a
pound.
Write to Kelsey Gee at kelsey.gee@wsj.com
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