Chicago | Reuters — Chicago Mercantile Exchange lean hogs gained for a sixth straight day on Thursday with tight supplies boosting cash hog and wholesale pork values, traders said.
May closed 1.625 cents per pound higher at 76.95 cents, and June ended up 0.225 cent, to 81.425 cents (all figures US$).
The morning’s average market-ready (cash) hog price in Iowa/Minnesota leaped $3.52 per hundredweight (cwt) from Wednesday to $74.74, the U.S. Department of Agriculture (USDA) said.
Separate USDA data showed the morning’s wholesale pork price, or cutout, climbed $1.72/cwt from Wednesday to $73.06.
Read Also
U.S. grains: Wheat futures rise on supply snags in top-exporter Russia
U.S. wheat futures closed higher on Thursday on concerns over the limited availability of supplies for export in Russia, analysts said.
Fewer hogs are available after farmers a few weeks ago rushed them to market to avoid falling prices at that time, said traders and analysts.
To salvage their fallen margins, packers raised the cost of pork at wholesale at a time when grocers are buying product for grilling and Mother’s Day specials, they said.
“I look for the cutout to continue to sneak up, with retailers maybe getting the hint that pork is probably as cheap as it’s going to be for a while,” a Midwest hog dealer said.
Live cattle slump
CME live cattle finished lower, pressured by fund liquidation and weaker wholesale beef prices, traders said.
April, which expired at noon CT, settled 1.3 cents/lb. lower at 159.5 cents, and June down 1.2 cents, to 149.7 cents.
Wednesday morning’s choice wholesale beef price was at $257.66/cwt, down 89 cents from Monday. Select cuts slumped $1.21 to $244.85, the USDA said.
Grocers are buying high-priced beef hand-to-mouth given readily available cheaper pork and chicken.
Despite futures’ steep bullish discounts to last week’s market-ready or cash prices, investors cautiously awaited this week’s cash sales.
Cash bids in Kansas were $156 to $158/cwt, and $157 in Texas, with feedlots in both states pricing cattle at $161 to $163, industry sources said. A week ago, U.S. Plains cash cattle fetched $157 to $160.50.
Profitable margins may prod some processors to spend the same as last week for supplies, traders said.
But, current futures prices and anemic beef demand are bearish cash price influences, they said.
CME feeder cattle April, which also expired at noon CT, settled 1.025 cents/lb. higher at 217.55 cents. It nearly matched the exchange’s latest feeder cattle index at 217.37 cents.
Remaining feeder cattle months closed flat to weak on profit-taking and spillover live cattle market pressure.
— Theopolis Waters reports on livestock futures markets for Reuters from Chicago.
