Commodities : Cattle Futures Prices Rally

Cattle futures prices rallied Wednesday on the mistaken belief that the national herd has shrunk by about 5% in the last year.

On other markets, soybeans and corn were lower while wheat and oats advanced; oil futures were mixed, and precious metals were slightly lower.

An Agriculture Department report issued after the close of trading Wednesday caught the cattle futures market leaning in the wrong direction. The nearby delivery at the Chicago Mercantile Exchange was up nearly a penny a pound, closing near the highs of the day.

But the report, a semiannual census of all cattle in the land, indicated there are about 1.5 million more animals than had been expected.

“People were going into the report saying it was going to be the lowest inventory since 1961,” said Tom O’Hare, an analyst in New York with Smith Barney, Harris Upham & Co.

The industry guess was that the inventory would be 100.4 million head, about 5% below that of a year ago. The Agriculture Department figure was down from a year ago, too, but only 3% lower.