Chicago | Reuters — Chicago Mercantile Exchange (CME) lean hog futures closed mixed on Wednesday as the market paused following a surge tied to last week’s bullish quarterly hog report from the U.S. Department of Agriculture (USDA), traders said.
CME October lean hogs settled down 0.875 cent at 90.8 cents/lb. while the most-active December contract inched up 0.025 cent to settle at 83.6 cents, paring gains after reaching 84 cents, its highest since Aug. 4 (all figures US$).
Hog futures soared this week after USDA on Friday reported that the U.S. Sept. 1 hog inventory and the June-to-August pig crop fell below trade expectations.
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After an 8.8 per cent climb over the first two trading days of this week, the December lean hogs contract ended nearly flat.
“People think that at least in the near term, this market has now priced the bullish number that came out from the USDA hogs and pigs report,” said Altin Kalo, economist with Steiner Consulting Group.
In other pork-related news, USDA pledged up to $500 million to prevent the spread of the fatal pig virus African swine fever, after Haiti and the Dominican Republic recently confirmed outbreaks.
A U.S. outbreak would likely slash U.S. pork exports and pig prices, hurting farmers and meat companies such as Tyson Foods.
Cattle futures ended lower. CME October live cattle settled down 0.225 cent at 121.775 cents/lb. and benchmark December fell 0.45 cent to end at 127.05 cents.
CME November feeder cattle settled down 1.775 cents at 155.275 cents/lb., pressured in part as CBOT corn futures rose, implying higher feed costs.
Cash cattle traded in Texas and Kansas at $122-$124/cwt, traders said, roughly steady compared with last week, while wholesale beef prices continued a month-long decline. Choice cuts fell $4.23/cwt, to $297.33/cwt, on Wednesday and select cuts fell $2.57/cwt, to $271.78/cwt, according to USDA.
“Especially with beef prices grinding lower, the packer is not out there bidding (higher) on cattle,” Kalo said.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago.
