By Benjamin Parkin
Cattle futures resumed a rally from last week as traders followed cash prices higher.
The futures market had rallied to a multi-week high last week before falling in the final trading session of 2017. Live cattle futures for February rose 1.5% to $1.2335 a pound when they resumed trading at the Chicago Mercantile Exchange on Tuesday. Contracts for feeder cattle were also higher.
Meatpackers paid feedyards an average of $122.78 per 100 pounds on a live basis and $194.48 dressed last week, according to the U.S. Department of Agriculture. That was mostly $3 to $5 higher than a week earlier.
That helped the futures market start the week on a strong footing, analysts said.
"We're fairly priced," said Jason Britt, president of Central States Commodities in Kansas City, Mo. That "may not be a reason for us to rally much, but maybe not a whole lot of reason for us to sell off right now."
Freezing temperatures across much of cattle country sparked concern about livestock, though the impact on prices was mixed. The ultra-cold weather could limit the speed at which cattle fatten, analysts said, weighing down average cattle weights and easing supply. But consumers were also likely to eat less beef, dampening demand.
Consumption "is pretty lethargic when it gets this cold," Mr. Britt said.
Hog futures were lower on Tuesday, easing off recent gains. The market rose to a multi-month high late last week, prompting traders to push prices back into a recent trading range.
CME February lean hog contracts fell 1.5% to 70.725 cents a pound.
The physical hog market was expected to continue rising on Tuesday, extending gains from last week. Freezing temperatures were causing transportation problems, market observers said, slowing the flow of fattened hogs from farms to slaughterhouses.
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