CHICAGO, July 29 (Reuters) - U.S. live cattle futures closed higher on Wednesday for a second session on firm cash cattle prices and a softer dollar, traders said.
Cash cattle traded in the Texas Panhandle and Kansas at $97 per cwt, mostly $1 higher than last week, the U.S. Department of Agriculture said in a daily note.
A weaker dollar added support, making U.S. meat more competitive in the global export market. The dollar index fell to a two-year low as the Federal Reserve affirmed its commitment to holding interest rates near zero.
Chicago Mercantile Exchange (CME) August live cattle futures settled up 0.550 cent at 101.450 cents per pound while the most-active October contract rose 1.050 cents to 106.050 cents a pound.
CME August feeder cattle futures ended up 1.275 cents at 141.975 cents per pound, and September feeder cattle rose 1.275 cents to 142.575 cents per pound.
Feeder cattle futures drew support from softening corn futures, which tend to make feedlots more profitable, bolstering demand for feeder cattle. Chicago Board of Trade December corn hit a one-month low on Wednesday.
However, uncertainty about domestic demand for beef hung over the futures market, capping rallies, as traders considered whether the coronavirus pandemic would curb Labor Day celebrations or purchases by school lunch programs.
CME lean hog futures declined, pressured by ample hog supplies and worries about export demand for U.S. pork from China, the world’s top pork consumer.
Argentina is nearing an initial agreement with China that could pave the way for potential investments by the Asian giant in local pork production for export.
“The real (U.S. pork) export buying has been from China, and the U.S.-China tensions are high,” said Don Roose, president of Iowa-based U.S. Commodities.
The benchmark CME October lean hog contract settled down 0.900 cent at 49.825 cents per pound.
Traders await the USDA’s weekly export sales report due Thursday, which will cover sales of U.S. grains, pork and beef for the week ended July 23.
Reporting by Julie Ingwersen; Editing by Leslie Adler
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