CHICAGO, Nov 26 (Reuters) - U.S. live cattle futures closed higher on Tuesday, recording a seven-month high on expectations that a winter storm this week would slow the movement of cattle to beef packing plants and possibly curb the ability of feedlot cattle to gain weight, traders said.
A powerful snowstorm swept across Colorado and into the U.S. Midwest on Tuesday, blocking roads and causing hundreds of flight cancellations. The storm dumped a foot (30 cm) of snow in parts of Colorado and buffeted the Denver area with wind gusts of 45 miles per hour (72 kph).
“It’s difficult to move cattle around. If you are a packer and you have to get cattle bought, it makes it more difficult to get that done, so you have to pay up a little more,” said Altin Kalo, agricultural economist for New Hampshire-based Steiner Consulting.
February live cattle futures on the Chicago Mercantile Exchange (CME) settled up 0.525 cent at 125.675 cents per pound after reaching 126 cents, the contract’s highest since April 18. Front-month December ended up 0.700 cent at 120.400 cents.
CME January feeder cattle futures fell 0.350 cent at finish at 141.625 cents per pound.
All three major Wall Street indexes notched record highs, adding to the firm tone in livestock futures by bolstering expectations of consumers’ willingness to pay up for high-priced cuts of meat.
CME lean hog futures closed mostly firm after a choppy session.
Benchmark February lean hogs closed up 0.075 cent at 67.825 cents per pound, with back months posting larger advances, including April hogs up 0.475 cent at 74.350 cents.
The market drew light support from headlines about potential progress in trade talks between the United States and China, the world’s top pork consumer.
U.S. President Donald Trump said Washington was in the “final throes” of work on a deal that would defuse a 16-month trade war with Beijing. But he also underscored U.S. support for protesters in Hong Kong, a potential sore point with China.
“There is some optimism (that) maybe a Phase One deal will get done after all, so a little buying due to that,” economist Kalo said of lean hog futures, adding, “It’s just money flow, more than anything else.” (Reporting by Julie Ingwersen; editing by Grant McCool)