Cattle futures rose for the second time in three sessions after U.S. legislators passed a budget deal to avert automatic tax increases and spending cuts, buoying the outlook for meat demand. Hog prices were little changed.
The Standard & Poor’s GSCI Spot Index of 24 commodities climbed as much as 1.6 percent after the House of Representatives approved a bill to avert the so-called fiscal cliff and prevent income taxes from rising for most U.S. workers. President Barack Obama said he will sign the bill that makes the George W. Bush-era income-tax cuts permanent for Americans while letting them expire for top earners.
The bill’s passage “means optimism of better meat demand simply because disposable income is going to stay relatively unscathed for the majority of the people,” Lawrence Kane, a market adviser at Stewart-Peterson Group, said in a telephone interview from Yates City, Illinois.
Cattle futures for February delivery rose 0.2 percent to $1.3255 a pound at 9:34 a.m. on the Chicago Mercantile Exchange. Prices rose 8.9 percent in 2012, the fourth straight gain and a record rally.
Feeder-cattle futures for March settlement added 0.2 percent to $1.546 a pound.
Hog futures for February settlement gained 0.1 percent to 85.775 cents a pound in Chicago. The commodity rose 1.7 percent in 2012, the fifth straight increase and the longest rally since at least 1987, according to exchange data compiled by Bloomberg. The contract started in February 1966.
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