Chicago | Reuters — Chicago Mercantile Exchange lean hog futures closed higher on Wednesday, supported by firm cash markets tied to tight supplies of hogs, traders said.
Hot weather in the U.S. midsection added support, posing potential disruptions to the transport of animals.
CME August lean hog futures settled 2.05 cents higher at 114.875 cents/lb. and most-active October hogs ended 1.525 cents higher at 96.025 cents.
The CME Lean Hog Index, a two-day weighted average of cash hog prices, rose to $115.91 per hundredweight (cwt), its highest level since June 2021.
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“Cash hog markets are still strong. Supplies are seasonally tight right now,” said Doug Houghton, analyst at Brock Capital Management. “Until the cash market shows that it has tapped out, the August (hog) futures are going to follow the cash index.”
Wholesale pork prices retreated slightly but stayed near an 11-month peak. The U.S. Department of Agriculture on Wednesday quoted the U.S. pork carcass cutout value at $124.37/cwt, down from Tuesday’s $125.12, the highest since Aug. 13, 2021.
Meanwhile, cattle futures inched higher in lacklustre trade as brokers waited for activity to pick up in cash markets for fat cattle.
CME August live cattle futures settled 0.025 cent higher at 135.75 cents/lb. and most-active October ended 0.225 cent higher at 141.325 cents. CME August feeder cattle futures fell 0.925 cent to finish at 177.825 cents/lb., pressured by profit-taking after recent advances.
Wholesale beef prices paused after a run-up to three-month highs a day earlier. Choice cuts of boxed beef fell by $2.04 on Wednesday to $270.53/cwt, according to USDA, and select cuts were down $1.48 at $242.25/cwt.
Traders await Friday’s monthly USDA Cattle on Feed report. Analysts surveyed by Reuters on average expect the government to report the number of cattle placed in feedlots during June at 1.586 million head, down five per cent from a year earlier.
However, analysts on average put the total number of U.S. cattle on feed as of June 1 at 11.301 million head, 100.1 per cent of a year ago. June marketings were seen at 101.9 per cent of a year ago.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago.
