Agriculture traders seem to be favoring the protein-rich Paleo Diet, loading up on bullish livestock bets while leaving grains behind.
December cattle and hog futures surged to contract highs in Chicago on Tuesday, with analysts citing strong U.S. and foreign meat purchases. Meanwhile, wheat prices continue to sag amid lackluster demand, with the December contract falling to its lowest ever.
“We’re seeing a pretty decent resurgence in demand over in the livestock sectors,” Dan Hueber, general manager of The Hueber Report in Sycamore, Illinois, said by telephone. While wheat exports are keeping pace with U.S. government projections, they’re “certainly not exciting,” he said.
On Tuesday, December cattle rose as much as 2 percent to a record $1.259 a pound. Hogs climbed by as much as the daily trading limit to 68.175 cents a pound, an all-time high for December futures. Wheat for December delivery fell as much as 2 percent to $4.1625 a bushel, the lowest ever for the contract.
Meat purchases may be picking up ahead of the winter holidays. A measure of U.S. consumer confidence climbed to the highest in nearly 17 years this month, which also may signal that shoppers are more willing to shell out a few extra dollars for a steak or roast. While domestic production is swelling, shipments to foreign buyers have been climbing so far this year -- another factor keeping supplies in check.
By contrast, world wheat stockpiles are expected to rise to an all-time high in the 2017-2018 season. U.S. grain is facing fierce export competition from rivals like Russia. December futures have slumped 29 percent from their July peak on the Chicago Board of Trade, even as some Southern Hemisphere producers face adverse weather for crops ahead of harvest.