Chicago | Reuters — Chicago Mercantile Exchange lean hog futures climbed to a near three-week high on Friday as strong demand and improved pork packer margins sparked buying ahead of the weekend, traders said.
Another solid week of pork export sales added support, soothing concerns about rising supplies of market-ready hogs, they said.
“Demand is showing up as hog numbers are coming up seasonally. If we can move pork through the bigger supply period of the year, the market’s going to view that as encouraging,” said Matthew Wiegand, a broker with FuturesOne.
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CME December lean hog futures jumped 1.65 cent to settle at 82.25 cents/lb., their highest since Sept. 26 (all figures US$). The contract held technical chart support at its 20-day moving average and closed above its 30-day moving average.
The average pork packer margin expanded to $16.72 per head on Friday, up from $14.45 on Thursday and $10.80 a week ago, according to livestock marketing advisory service HedgersEdge.com LLC.
Net sales of fresh, chilled and frozen pork totaled 29,900 tonnes in the week ended Oct. 6, topping 25,000 tonnes in sales for at least the sixth straight week, according to U.S. Department of Agriculture (USDA) data.
Cattle futures ended mostly lower, pressured by technical selling and worries that high inflation could hurt demand for higher-end beef cuts.
CME December live cattle fell 0.15 cent, to 147.775 cents/lb. The benchmark contract hit overhead resistance at its 20-day moving average and failed to hold support at its 100- and 200-day moving averages, closing below the key technical level.
Firmer U.S. Plains cash cattle prices supported spot October, the only contract that finished higher on Friday at 146.95 cents/lb., up 0.5 cent.
CME November feeder cattle ended down 1.325 cent at 174.775 cents/lb., weighed down by elevated corn feed prices.
— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago.
