According to a report by Bloomberg, cattle prices may rise 13% by the end of the year on the Chicago Mercantile Exchange and Brazil’s Bolsa de Mercadorias e Futuros. More from this story:

Not since 1996, when corn reached what was then a record $5 a bushel, have cattle been this cheap relative to their primary source of feed. Cattle are the seventh-worst performer of the 26-member UBS Bloomberg Constant Maturity Commodity Index in the past year, a time when soybeans, oil and copper jumped to records. After adjusting for inflation, cattle are down 27 percent from their 1988 peak.

“It’s pretty certain that we’ll see a decline in domestic supply in the U.S.,” Joesley Batista, chief executive officer of JBS SA, the world’s biggest beef producer, told reporters in Sao Paulo on May 15. “As a result, we’ll have price hikes and improved margins.”

Production also is dropping or failing to keep pace with demand in China, Brazil and the European Union, mostly for grain-fed beef, analysts and government data show.

“We expect meat prices, especially beef prices, to rise this year,” said Peter Weeks, chief economist at Meat & Livestock Australia, a trade group in Sydney. “We’ve already seen big increases in beef prices in China, Russia, India and throughout Southeast Asia.”

Now is a great time to invest in a livestock ETF, says Ian Davis in The Growth Stock Wire. And hog prices are set for a similar upswing to cattle prices.

“Hog farmers are not running charities. When the input costs for hog producers soar, the price of hogs must also rise. By buying hogs, we are piggybacking (excuse the pun) on the uptrend in agriculture and crude oil.

“So when the uptrend finally begins, how should we play it?

Read on how to profit when this upswing kicks in with this livestock ETF.

“When the gold price rises, jewelry gets more expensive,” says Tom Dyson in DailyWealth. It’s the same way with farm animals. When the corn price rises, livestock must get more expensive. Corn has doubled in the past 18 months, but livestock prices are still in the same range they were six years ago. They will catch up with corn.”

Tom also recommends that his readers invest in a livestock ETF.

“Two trade in London under the symbols CATL.L and HOGS.L,” says Tom. “They track the Dow Jones AIG sub-indexes for live cattle and hogs.”

Nickel’s woes continued in spades as it struggled to hold the $11 level before giving it up at mid-morning and sliding to a close at $10.5793/lb., down more than 64 cents. Zinc also barely came off its intraday low to end at $0.9503/lb., down more than 3¾ cents. Aluminum showed strength early before it too succumbed to selling that dropped it to $1.3308/lb., down a penny and a quarter, while lead fell precipitously to an intraday low of $0.9139/lb., down almost 5½ cents.

No doubt about it, after yesterday’s selloff it’s clear that traders’ appetite for the industrial metals has all but completely dried up.

The decline was general, as the UBS Bloomberg Constant Maturity Commodity index slumped 0.9, with oil, gold, and coffee all slipping on concern the economy in the U.S. won’t recover anytime soon, slicing into demand.

In terms of copper imports, “April is generally the biggest import month of the year for China,” said Daniel Hynes, an analyst at Merrill Lynch & Co. in London. And although they did rise 1.2% from March to April, the Beijing-based customs office said, shipments declined 31% from the year-earlier period.

Looking for a bright spot, Lehman Brothers analyst Michael Widmer said that, “Imports were lower year-on-year because there was more restocking last year than this, but imports have risen month-on-month … while some market participants expected them to fall.”

Meanwhile, nickel skidded to a two-year low, as it has been in a surplus for the 13 months through March, according to the International Nickel Study Group.

More of the same may be coming. Natixis Commodity Markets predicts that production will outpace demand for a second consecutive year in 2008. Output will increase with today’s opening of BHP Billiton’s Ravensthorpe mine in Western Australia tomorrow. It will produce about 45,000 tons a year, making it the biggest new mine since Voisey’s Bay commenced operations in 2005.

And in company news, Namibia’s biggest zinc producer, Skorpion Zinc declared its Rosh Pinah mine has been in lock-out since Wednesday, following a strike that began May 10. The company declined to comment on the effect of the strike on the mine’s output.

Source: Base Metals Tank Again