Chicago | Reuters — U.S. feeder cattle futures rose on Monday, reversing earlier declines and extending steep gains of recent days as wintry weather hampered animal weight gains and feed prices tumbled, traders and analysts said.
Live cattle futures steadied after falling sharply early in the session at the Chicago Mercantile Exchange, as big declines in equities helped to anchor cattle markets. Lean hog futures also were about flat.
Feeder cattle for January delivery gained about one per cent to the highest since Nov. 12. The contract rose for the third session in a row and for the eighth time out of the last 10. January feeders finished 1.875 cents higher at 168.775 cents/lb. (all figures US$).
Futures rose after news circulated that cash prices at a closely tracked auction in Oklahoma City were as much as $20/cwt higher. “Demand is especially good for those heavier-weight steers and heifers that could still finish in April,” the U.S. Department of Agriculture said of the auction.
Snow, rain, flooding and heavy winds last week in the southern U.S. Plains and Midwest left feedlots muddy and small numbers of cattle may even have perished in the storms, which killed more than 50 people.
“Mud and freezing temps diminish the tonnage (of cattle) coming to market,” said Steve Erdman, analyst at brokerage EFG Group in Chicago.
Prices for corn, the main feed for most feedlot operators, fell to contract lows at the Chicago Board of Trade, and some investors were selling corn and buying feeder cattle futures, traders said.
More actively traded live cattle futures finished almost unchanged, with narrow price gains for the third straight session but upside resistance at their roughly two-month peak reached on Dec. 30. Gains in wholesale beef also supported futures.
February live cattle were up 0.075 cent at 136.875 cents/lb. February lean hogs were 0.075 cent higher at 59.875 cents/lb.
Cash hog prices were 66 cents higher at $49.33/cwt at the closely watched cash markets in Iowa and southern Minnesota, USDA data showed.
— Michael Hirtzer reports on agriculture and ag commodity markets for Reuters from Chicago.