Chicago | Reuters — Chicago Mercantile Exchange lean hog futures closed lower on Wednesday, retreating from six-week highs set a day earlier as wholesale pork prices backed down after spiking higher early in the week.
Live cattle futures closed mixed, underpinned by surging beef prices.
At the CME, April hogs settled down 2.55 cents at 86.55 cents/lb. and June hogs ended down 1.475 cents at 103.8 cents (all figures US$).
Hog futures fell after the U.S. Department of Agriculture (USDA) priced the pork carcass cutout late Tuesday at $83.01 per hundredweight (cwt), a drop of $4.71 from Monday’s reading of $87.72, which was the highest since December. Monday’s jump in the cutout price had lifted hog futures, but the setback late on Tuesday deflated futures on Wednesday.
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The pork cutout was little changed on Wednesday afternoon, rising four cents to $83.05/cwt, according to USDA data.
CME live cattle futures closed mixed, with the spot contract reaching a multi-year peak for a seventh straight session as beef prices ticked higher.
Thinly traded February cattle futures settled Wednesday up 0.15 cent at 164.9 cents/lb. after reaching 165.05 cents, the highest on a continuous chart of the front contract since January 2015. April cattle, the most active contract, finished down 0.025 cent at 165.075 cents/lb., pausing after a contract high set on Tuesday.
CME March feeder cattle futures settled up 1.1 cents at 187.975 cents/lb., supported by a setback in corn futures that signaled cheaper feed costs.
In the wholesale market, USDA priced choice cuts of beef late Wednesday at $287.91/cwt and select cuts at $273.64/cwt, both the highest readings in more than a year.
In global news, Brazil’s beef exports to China will be halted starting Thursday after a case of BSE was confirmed in Brazil’s northern state of Para.
Traders await USDA’s monthly Cattle on Feed report on Friday. Analysts surveyed by Reuters on average expected the government to report the number of cattle in U.S. feedlots as of Feb. 1 at 11.772 million head, down 3.5 per cent from a year ago. Analysts on average estimated cattle marketings in January at 1.842 million head, up 3.9 per cent from a year earlier.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago.
