Oct. 10 (Bloomberg) -- Feeder-cattle futures rose to a record as the falling price of corn increased profit prospects for U.S. ranchers who raise the animals before selling them to meat processors. Hogs gained.
Corn futures in Chicago have tumbled 37 percent this year, the biggest drop among the 24 commodities tracked by the Standard & Poor’s GSCI Spot Index. The grain is a main ingredient in livestock feed. Cash prices for cattle were $3 to $5 higher than a week earlier, according to Anderson County Livestock Auction in Elkhart, Texas.
“The price of corn is the main factor” driving the feeder market, Lane Broadbent, vice president of KIS Futures Inc. in Oklahoma City said in a telephone interview. “The cash market is incredible.”
Feeder-cattle futures for November settlement rose 0.9 percent to close at $1.67925 a pound at 1 p.m. on the Chicago Mercantile Exchange. Earlier, the price touched an all-time high of $1.681. Trading was 41 percent above the 100-day average, according to data compiled by Bloomberg.
Feedlot operators typically buy 1-year-old cattle that weigh 500 pounds (227 kilograms) to 800 pounds, called feeders, which are fattened on corn until they weigh 1,300 pounds and are sold to meatpackers.
Cattle futures for December delivery increased 0.2 percent to $1.32175 a pound on the CME.
Hog futures for December settlement rose 0.1 percent to 86.65 cents a pound. Prices dropped 1.9 percent yesterday.
--Editors: Millie Munshi, Patrick McKiernan