Futures on cattle grew on Wednesday amid increasing cash prices due to fewer beef supplies on the market. The prices were supported by a weakening US dollar.
By the end of CME trades August futures on cattle gained 0.57 cent (0.5%) and rose up to USD 1.1312 per pound. October contract increased by 0.22 cent (0.2%) and constituted USD 1.1827 dollars per pound. August futures on well-fed livestock lost 0.5% and equaled thus USD 1.3435 dollars per pound.
Traders say that futures grew as market participants have been concerned about fewer meat supplies owing to a continuous drought in the US Middle West. In Kansas and southern states many farmers specializing in cattle breeding had to sell large part of their livestock as high temperatures may well cause more losses.
In July mass cattle death was registered in the US Middle West and the Great Plains since the animals were not able to bear that high temperatures. Yet the part of cattle that managed to endure the drought considerably lost weight. Farmers say that despite good feeding these animals will not be able to gain any weight.
This news exacerbated concerns of market participants over cash prices for beef in Texas that equaled USD 1.08 per pound while in some states they grew up to 1.12-1.13 dollars per pound.
According to the reported data, this week wholesale prices gained 4 cent.
The market was also supported by a weaker US dollar. Declining American currency makes futures less expensive for holders of other currencies.