Cattle futures rose to a six-week high on speculation that U.S. meatpackers are paying more for animals as profit improves. Hogs also gained.
Spot-market steers sold for about 92 cents a pound yesterday in Texas, up 1 cent from a week earlier, government data show. Packers are making about $40 per head of cattle slaughtered, said David Kruse, the president of CommStock Investments Inc. in Royal, Iowa. The wholesale price of choice beef fell 0.3 percent at midday after reaching a four-week high this week.
“Packers have had a good ability to maintain margins, which maintains their interest in killing cattle,” Kruse said. “This week, it appears that the packers are paying up a little again, because they can. They have the margin ability to do so.”
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