Chicago | Reuters — Technical buying and short covering boosted lean hog futures at the Chicago Mercantile Exchange on Friday, traders said, extending gains a session after the market climbed by its daily maximum.
Futures were recovering after dropping to contract lows this week.
Traders were also keeping an eye on forecasts for a U.S. winter storm that could disrupt livestock transportation and slaughtering. Some Midwestern farmers are preparing for the upcoming storm, which could increase livestock stress, the U.S. Department of Agriculture (USDA) said in a daily weather report.
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“I am of the view that the wintry weather moving into the Plains and eastern half of the country led to a round of short covering by funds,” independent trader Dan Norcini said.
Most-active CME February lean hog futures LHG24 finished up 0.950 cent at 70.000 cents per pound and hit its highest price since Dec. 26.
The market’s daily trading limit on Monday will revert to its typical 3.75 cents, after expanding temporarily on Friday, CME said.
February hog futures ended up about 3 per cent for the week after touching a contract low on Wednesday under pressure from large supplies.
“Most of the upward move in there has been due to more technical factors than anything fundamental I can see at this time,” Norcini said. “The pork cutout is holding up fairly well and that is probably spurring a bit of bottom fishing by some.”
The USDA said the wholesale pork carcass cutout value eased $0.30 on Friday, to $84.20 per cwt.
Meatpackers slaughtered an estimated 489,000 hogs, up from 479,000 hogs a week ago and 456,000 hogs a year ago, according to the USDA. Cattle slaughtering, meanwhile, declined to an estimated 124,000 head from 125,000 head a week ago and 126,000 head a year ago.
CME February live cattle futures LCG24 slipped 0.550 cent to 170.575 cents per pound, but still ended up 1.2 per cent for the week. March feeder cattle FCH24 dropped 1.500 cents to 224.150 cents per pound, finishing up 0.5 per cent for the week.
