Cattle futures rise on cash hopes

U.S. live cattle futures bounded to life-of-contract highs for the third straight session on Wednesday, rising on expectations that beef packers will continue paying higher prices in Plains cash markets, traders said.

About 1,500 cattle sold at the weekly Fed Cattle Exchange online auction at $120 per cwt, which was up from feedlot sales last week ranging from $116 to $119. That bolstered hopes that strong packer demand will provide support to the futures market.

December live cattle futures settled up 0.975 cent at 126.600 cents per pound on the Chicago Mercantile Exchange. The three-day percentage gain of 4.8 percent was the biggest such streak since May.

CME January feeder cattle futures climbed to a contract high of 161.250 cents, before settling at 160.650 cents per pound, up 1.075 cents.

Some investors were buying cattle futures and selling hogs. While cattle fetched higher prices at the online auction, cash hog prices fell for the second straight day at the key Iowa and southern Minnesota market, according to U.S. Department of Agriculture data.

Source: Reuters (via Drovers)