Chicago | Reuters — Lean hog futures on the Chicago Mercantile Exchange closed lower on Wednesday on profit-taking and positioning ahead of the U.S. Department of Agriculture’s quarterly hog inventory report.
However, traders said the government data, released after the close, was supportive for futures.
USDA reported the U.S. hog herd as of March 1 at 72.2 million head, down 2.3 per cent from a year ago, a larger decline than analysts expected. Analysts surveyed by Reuters on average expected a herd of 73.046 million head, down 1.2 per cent from a year ago.
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“It looks friendly to me. Everything was below the average trade guess,” said Dennis Smith, commodity broker at Archer Financial. “All of the farrowing intentions for spring and summer were lower than a year ago. The report confirms that (hog herd) contraction continues.”
Futures slipped ahead of the report, pausing after climbing for most of the last three weeks. CME’s benchmark June lean hogs contract settled down 0.4 cent on Wednesday at 124.225 cents/lb., easing after setting a life-of-contract high on Monday at 126.875 cents.
Hog futures were likely to open higher on Thursday, Smith and others said.
CME cattle futures closed mostly lower. June live cattle ended down 0.475 cent at 138 cents/lb., retreating after setting a four-week high a day earlier. CME May feeder cattle finished down 0.5 cent at 168.9 cents/lb., staying inside Tuesday’s trading range.
Market-ready cattle traded in the southern Plains cash market at $138 per hundredweight, steady with last week, traders said.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago.
