Oct. 14 (Bloomberg) -- Feeder-cattle futures rose to a record for the third straight session on concern that U.S. ranchers are holding animals longer as pastures rebound from a drought and cheaper grain spurs demand from feedlots. Hogs fell.
The U.S. High Plains Regional Climate Center reported that drought conditions have eased after damaging pastures last year and forcing ranchers to sell cattle to feedlots sooner than normal. Today, the price of corn, the main grain ingredient, touched a three-year low, improving the profitability for companies to buy young animals to fatten for slaughter.
“Weather conditions have been much better than last year,” Dan Vaught, an economist at Doane Advisory Services in St. Louis, said in a telephone interview. “Producers have incentive to hold younger cattle longer.”
Feeder-cattle futures for November settlement increased 0.1 percent to close at $1.694 a pound at 1 p.m. on the Chicago Mercantile Exchange. Earlier, the price reached $1.6995, the all-time high for the most-active contract.
Feedlot operators typically buy 1-year-old cattle that weight 500 pounds (227 kilograms) to 800 pounds, called feeders, which are fattened on corn until they weigh about 1,300 pounds and are sold to meatpackers.
Cattle futures for December delivery increased 0.5 percent to $1.3315 a pound. Earlier, the price reached $1.33175, the highest since Feb. 4.
A blizzard last week with as much as 48 inches (122 centimeters) of snow in parts of South Dakota probably left tens of thousands of cattle dead, Jodie Anderson, the executive director of the South Dakota Cattlemen’s Association, said today in a telephone interview.
Hog futures for December settlement fell 0.2 percent to 86.35 cents a pound.
--Editors: Patrick McKiernan, Millie Munshi