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Cattle futures surge this week

02/27/2014 @ 9:42am

U.S. cattle futures climbed higher overnight, lifted by record cash cattle prices paid in the Great Plains Wednesday and steadily rising wholesale beef prices.

Prices for cattle in the cash markets have slowly retraced gains from earlier this year as rising wholesale beef prices give processors more incentive to pay up for their slaughter needs. A historically tight supply of market-weight animals being fed for slaughter has also underpinned gains in cash prices.

Cash trade began to unwind midday in Nebraska, with packers paying a record $1.52 a pound live for around 25,000 head of cattle. In Kansas and Texas, cattle were priced at mostly $1.50 a pound live over the course of the day's trade.

Because futures tend to converge with prices for cattle in the cash markets near the front month contract's expiration, live- and feeder-cattle futures rallied as traders digested the news of the record-breaking cash sales.

Live-cattle for February are up 1.6 cents, or 1.1%, to $1.5025 a pound in electronic trade. Feeder-cattle for March are up 0.2 cent, or 0.1%, to $1.7220 a pound.

Hog futures are also rising as average prices paid in the cash markets has surged higher over the past week. As meat processors compete for fewer available hogs, facing losses from porcine epidemic diarrhea virus, or PEDV, prices have risen in the cash markets. The disease, which began to rapidly spread throughout the U.S. in the fall, has continued to affect new barns, killing more piglets in February.

April hogs are up 2.10 cent, or 2.1%, to $1.0312 a pound, an all-time high for that contract. June hogs are up 1.12 cents to $1.0947 a pound, also a fresh contract high.

Write to Kelsey Gee at kelsey.gee@wsj.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

(END) Dow Jones Newswires

February 27, 2014 10:01 ET (15:01 GMT)

DJ U.S. Cattle Futures Surge on Record Cash Prices; Hogs Hit New Peaks->copyright

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