Surging demand for meat from the U.S. pushed up prices for cattle to their highest value in two-plus years, Bloomberg reports.
Chinese demand is especially high and derives from the nation's interest in reinforcing its reserves, according to a statement from Commerce Minister Chen Deming, which was posted on the department's website.
"Cattle are just on a run here," Lawrence Kane, a market adviser at Stewart-Peterson Group in Yates City, Illinois, told Bloomberg. "We're moving beef internationally. We've got good demand with a limited amount of beef."
Just before 10:30 a.m. on the Chicago Mercantile Exchange, February-delivery cattle moved up 0.1 cents to $1.059, representing a 0.1 percent increase. Earlier in the day, cattle prices rose the .03 cent maximum allowed to $1.088, the highest price since August 2008.
Thus far this year, the price of wholesale choice beef has increased 15 percent.
A Wednesday Agriculture Department report on meat inventories "is supposed to be bullish, showing the pre-holiday drawdown in beef and pork as retailers met the heavy holiday demand for meat," Tim Hannagan, an analyst for PFG Best Inc. in Chicago, said in an e-mail.
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.