October cattle futures rose to the highest level in more than 8 weeks today as the speculations that the extremely hot weather will impact the amount of beef produced by the farmers.
First of all, the unusually hot summer has already killed some animals in U.S, as reported by the Kansas Livestock Association (KLA). Second, the current heat levels threaten the weight gains of the living cattle, decreasing the amount of useful meat extracted by the farms. Meanwhile National Weather Service predicts further increase of the temperature in the states that are the major producers of the commodity.
According to the reports by KLA the cattle deaths due to heat started to occur since about July 16, while the number of such deaths isn’t report. Rich Nelson of Allendale Inc. commented on the current situation:
There were those limited deaths in Kansas, but the bigger deal is the impact on potential weight gains for cattle in the feedlots.
Cattle futures contracts with delivery in October rose from $0.94500 to $0.94875 (or about 0.4 percent) as of 16:09 GMT today on the CME after reaching as high as $0.95025 during early trading session.
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