U.S. cattle futures closed higher on Tuesday recovering much of Monday's losses and pulled up by a rise in the Dow Jones industrial average, double-digit gains in corn and a $2 rise in crude oil.
Hog futures finished higher to reclaim some of Monday's losses on support from record high cash pork prices and higher outside markets.
Cash cattle markets were quiet on Tuesday, which left futures traders looking to outside factors for guidance.
"If corn is going to start going back up that could curb cattle placements," said Dennis Smith, broker with Archer Financial.
Corn prices dropped sharply early this month, but have since headed back to near $7 per bushel ahead of a crop report that may show the smallest U.S. corn stocks in seven years.
High feed corn prices can curb cattle production.
A weak dollar, which can aid beef exports, and higher beef prices gave cattle additional support. USDA reported the average choice beef price early on Tuesday at $179.30 per cwt, up 82 cents from Monday and the highest since May 5.
However, analysts believe beef sales will slow after next Monday's U.S. Independence Day holiday as hot summer weather can hurt meat sales.
Spreading limited gains in August cattle as funds bought October and sold August to move longs to deferred months. Such spreading will increase over the next two weeks as other funds participate.
CME June cattle 2LCM1 closed up 0.850 cent at 112.350 cents per lb and volume-leader August 2LCQ1 was up 0.375 cent at 111.750. The June contract expires on Thursday.
Feeder cattle finished higher, pulled up by live cattle futures and by more gains in cash feeder cattle markets.
The latest CME feeder cattle index, which is a measure of cash prices, jumped 3.01 cents to 133.09 cents per lb. Feeders at the important Oklahoma City market traded up $1 to $3 per cwt on Monday.
Click here to see more...