Chicago Mercantile Exchange (CME) live cattle futures jumped on Thursday, buoyed by rising cash cattle prices and a government inventory report confirming that the total number of US cattle fell to a 73-year low, reported Reuters.
CME April live cattle futures settled up 2.475 cents at 183.175 cents per pound, nearing Monday's 2-1/2-month high of 183.450 cents. March feeder cattle futures surged 4.725 cents to finish at 244.875 cents per pound after posting a three-month top at 245.6 cents.
The markets got off to a strong start after the US Department of Agriculture (USDA) late on Wednesday reported the total number of US cattle as of Jan. 1 at 87.2 million head, down 2% from a year earlier and the lowest level since 1951. Ranchers have slashed their herds as a multi-year drought in the western US reduced the land available for grazing and raised feeding costs.
"The (cattle) numbers are going to tighten as we go forward," said Don Roose, president of Iowa-based US Commodities. "Maybe with the moisture improving in some of these areas, the cow-calf operations will start to rebuild the herd, but no signs of it yet," Roose said.
The rally accelerated as market-ready cattle traded in the Texas and Kansas cash markets at around $178 per hundredweight (cwt), up $3 from the bulk of last week's trades. The higher prices reflect the impact of frigid winter weather in mid-January that reduced cattle weights, Roose said.
Wholesale beef prices were mixed on Thursday afternoon with choice cuts priced at $294.94 per cwt, up 40 cents from Wednesday, while select cuts fell 92 cents at $283.25 per cwt, according to USDA data.
CME hog futures fell on a round of profit-taking after the benchmark April contract set a four-month high this week. April hogs ended down 1.075 cents at 83.750 cents per pound.
The CME's Lean Hog Index, a two-day weighted average of cash prices, rose to 72.38 cents per pound, its highest reading since Nov. 23.
The USDA priced the pork carcass cutout late Thursday at $88.59 per cwt, up $1.03 from Wednesday.
Export sales of US pork in the week to Jan. 25 totalled 42,900 metric tons and beef sales totalled 16,700 tons, the USDA said.
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