Hogs halted a four-session streak of declines while live cattle futures edged higher to notch a 1-1/2-week high on the Chicago Mercantile Exchange.

“If you look at the chart, we’ve gotten down to support where it holds,” CHS Hedging analyst Steve Wagner said of hogs.

The hog market had been under pressure for weeks due to abundant supplies and declining prices for both pork and hogs in cash markets.

Most-active CME April hog futures finished up 0.65 cents at 59.075 cents/lb., gaining for only the third time in the last 15 sessions.

“There’s no bullish scenario for hogs. Demand is good but we’re clearly not getting a bump in exports,” Wagner added.

Top importers Mexico and China each have tariffs on U.S. pork, impeding shipments. Pork packers and hog farmers both were hoping that China would ramp up purchases this year due to the African swine fever virus that has forced farmers there to cull herds.

The cattle market has been on more solid ground, with beef exports booming while relatively big cattle supplies were in balance with robust demand from beef packers.

CME April live cattle settled up 0.375 cent at 128.3 cents/lb., hovering just below the contract peaks reached on Jan. 31 (all figures US$). CME March feeder cattle futures were 0.575 cent higher at 144.675 cents per pound.

Cattle were supported in part by news that beef packers late on Friday and on Saturday bought cattle in the southern U.S. Plains at $125/cwt, up about $1 from deals in the previous week.

The U.S. Department of Agriculture confirmed that more than 2,000 cattle sold for an average price just under $125.

— Michael Hirtzer reports on commodity markets for Reuters from Chicago.

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The most active April hogs contract dropped to a fresh five-month low and has now declined in 12 out of the past 14 sessions. The contract settled down 1.175 cents at 58.425 cents/lb. (all figures US$).

“The (trading) volume is not that big, it’s just trend followers. It’s a snowball rolling down a hill,” Archer Financial Services broker Dennis Smith said of the declines.

Wholesale pork prices have also traded at the lowest levels since August, suggesting there was too much supply and not enough demand. The U.S. Department of Agriculture said the pork cutout was down 44 cents, to $65.17/cwt, and values for cuts such as hams, pork bellies and loins each fell.

Smith said buyers such as importers in China likely will take advantage of the low meat prices. Hog farmers in China have culled herds due to the African swine fever virus and buyers in China may need to tap overseas markets soon.

“I’m looking for a big surge in pork business … There’s no reason to wait to start booking (meat orders),” he said.

Beef prices have been comparatively stronger recently, bolstered in part by a record pace of exports late last year.

Choice-grade beef was down 86 cents, to $216.71/cwt, but values still were hovering near a roughly two-month high notched last week.

Robust beef demand has underpinned cattle futures, even as traders waited for deals to develop in U.S. cash cattle markets.

CME April live cattle finished up 1.1 cents at 127.925 cents/lb. while March feeder cattle were up 0.85 cent at 144.1 cents.

Packers in parts of the southern Plains raised bids to buy cattle to about $125/cwt late on Friday but feedlots were holding out for even higher prices. Cash cattle last week fetched mostly $124/cwt, according to USDA.

— Michael Hirtzer reports on commodity markets for Reuters from Chicago.

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Most-active Chicago Mercantile Exchange April hogs dropped to the lowest levels in five months and its premium over the front-month February contract declined in spreading.

April hog futures settled down 1.3 cents, to 59.6 cents/lb., while February eased 0.65 cent to 55.275 cents (all figures US$).

In both 2017 and 2018, February hogs fetched a big premium to April, a time when more hogs typically are available than in the North American winter. But April hogs on Monday had a premium of over five cents per pound over February, before the spread corrected to about just above four cents on Thursday.

The spread in 2019 has moved in a different direction than the past few years due in part to expectations China would import more American pork as the African swine fever virus (ASF) forced Chinese hog producers to cull herds, according to Midwest Marketing Solutions analyst Brian Hoops.

“We built a premium because of ASF — that we would be exporting to China,” Hoops said.

However, China has bought only modest amounts of U.S. pork, forcing some traders to cut losses on their spread trades.

The U.S. Department of Agriculture’s wholesale pork cutout was trading at the lowest levels since August, with ham prices of just over 44 cents per pound the lowest in over two years. Meanwhile, cash hogs in the Iowa and Minnesota market fell 84 cents to $48.63.

“There’s a tremendous amount of (pork) supplies and not enough avenues to get rid of it,” Hoops added.

Cattle futures were little changed. The market stayed in a relatively narrow range as traders awaited deals in cash cattle markets.

CME April live cattle finished 0.325 cent lower at 127.175 cents/lb. and CME March feeder cattle were 0.075 cent higher at 143.25 cents.

— Michael Hirtzer reports on commodity markets for Reuters from Chicago.

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Cattle futures also eased on the Chicago Mercantile Exchange but prices stayed within recent trading ranges as investors waited for deals to develop in cash cattle markets.

“Certainly, a lot of the enthusiasm we had in some of these markets has disappeared,” said Steiner Consulting Group analyst Altin Kalo.

CME April lean hog futures fell 0.7 cent, to 60.9 cents/lb., near their session bottom of 60.8 cents that was the lowest point for the contract since Aug. 15.

The U.S. Department of Agriculture pegged wholesale pork prices at $65.61/cwt, down 61 cents and also the lowest since August. Prices for cuts such as hams have fallen sharply in recent days, weighing down the pork cutout comprised of several cuts from hams to loins to pork bellies.

“There’s way too much pork in the market,” Kalo added. “We are producing record supplies for this time of year.”

Some traders were betting on increased U.S. pork exports to China as the African swine fever virus forced Chinese hog farmers to cull herds in the world’s biggest pork market. But that demand may not show up until later this year.

Weak pork prices forced some meat packers to cut bids to buy hogs in the U.S. Midwest, further weighing on futures.

USDA pegged average cash hog prices in the top Iowa and southern Minnesota market at $49.52/cwt, down 51 cents.

There were few deals in U.S. cash cattle markets so far this week. The CME Group posted 25 deliveries against CME February cattle futures — notices that suggested delivering against futures might be more advantageous than waiting for better prices in the cash market.

At the weekly Fed Cattle Exchange online auction, 161 cattle sold out of 294 head offered at an average price of $124.11/cwt, according to the auction website. That price was on par with cash cattle deals last week in the U.S. Plains.

CME April live cattle edged down 0.475 cent, to 127.15 cents/lb., while CME March feeder cattle futures shed 0.65 cent, to 143.175 cents.

— Michael Hirtzer reports on commodity markets for Reuters from Chicago.

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Hogs on Monday surged from a multimonth low, boosted in part by technically oversold conditions. But the market remained anchored by abundant U.S. hog supplies and relatively weak prices in cash hog markets.

The most-active CME April hog contract fell 1.45 cents, or 2.3 per cent, to 61.6 cents/lb. (all figures US$). Front-month February hogs shed 0.95 cent, or 1.5 per cent, to 56.425 cents/lb.

“Yesterday was so overdone to the upside that we needed to have some follow-through support (to propel further gains), and we didn’t get it,” said one livestock futures trader who was not authorized by his company to speak with the media.

Traders have been waiting for news that China and Mexico would remove tariffs on imports of U.S. pork, which could result in larger export sales of U.S. meat. With no news on that front, or any other fresh information, the traders were reliant largely on daily government price data to help set direction in the futures market.

The U.S. Department of Agriculture after the close of futures trading said cash hog prices in the top Iowa and southern Minnesota market were 23 cents higher, to $49.93/cwt. But the higher hog prices were met by lower pork values, with the wholesale pork cutout down $1.90, to $66.20/cwt, led by drops in prices for hams and pork bellies.

CME live cattle futures were higher in bull-spreading, supported by a lack of deliveries against futures — a suggestion that cash markets could be strong this week.

The CME Group has not posted any deliveries against February live cattle futures. A large amount of deliveries would indicate cattle owners see the futures market as more beneficial than seeking private deals in the cash market.

CME February cattle ended up 0.975 cent, to 126.7 cents/lb., gaining on the more-active April contract, which finished up 0.625 cent at 127.625 cents.

“I would anticipate that cash (cattle) would be fully steady this week,” said Cassie Fish, an analyst and author of industry blog The Beef.

Cash cattle last week in the U.S. Plains traded mostly between $123 and $124/cwt, traders said.

Thinly traded feeder cattle futures were narrowly lower, with March feeders easing 0.4 cent, to 143.825 cents.

— Michael Hirtzer reports on commodity markets for Reuters from Chicago.

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Firmer prices for pork and beef in the wholesale market also buoyed futures.

Hogs jumped as much as four per cent on the Chicago Mercantile Exchange, rising after prices fell to the lowest since August late last week. Most-active CME April lean hogs finished up 2.925 cents at 63.05 cents/lb., notching the contract’s biggest gains in about two months (all figures US$).

“It’s more of a technical bounce than anything,” said Darin Fessler, senior hedge adviser at Lakefront Futures. “Hogs got to an oversold level that guys were stepping in to buy.”

CME April live cattle were 0.725 cent higher at 127 cents/lb., after touching a contract peak of 129.475 cents on Thursday.

CME March feeder cattle climbed 1.7 cents to settle at 144.425 cents/lb.

Feeder cattle steers were up $2/cwt and feeder heifers were down $1-$3/cwt at a closely watched cash auction in Oklahoma City, according to the U.S. Department of Agriculture.

USDA said choice-grade boxed beef prices were up $3.39, to $217.65/cwt, while select beef cuts were up 26 cents, to $213.41/cwt.

Pork prices in the wholesale market were $1.13 higher, to $68.12/cwt, and hogs in the Iowa and southern Minnesota cash market were down 39 cents, to $49.85/cwt, according to USDA.

— Michael Hirtzer reports on commodity markets for Reuters from Chicago.

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Feeder cattle futures fell to a roughly 1-1/2 week low, pressured in part by rising corn prices that boosted costs for fattening cattle. Worries of reduced demand for cattle from feedlots also weighed ahead of the second big winter storm to hit the region in as many weeks.

Lean hogs extended recent declines on abundant U.S. supplies and a lack of supportive information that could stem losses.

CME February live cattle finished 0.725 cents lower at 127.1 cents/lb. and most-active April cattle was down 0.825 cent, to 126.9 cents (all figures US$). Both contracts had jumped to life-of-contract highs on Wednesday.

“Live cattle futures, especially nearby February futures, were technically overbought going into today’s session and ripe for at least a short-term downward correction,” advisory Brock and Associates said in a note.

The cattle market had run up on worries that heavy snows and plunging temperatures could impact shipments of cattle to slaughterhouses and slow weight gains in cattle. In bitter-cold temperatures, cattle devote more energy to keeping warm than gaining weight, reducing feed efficiency and potentially reducing overall supplies.

The storm was expected to hit the Plains and Midwest regions by this weekend, following a storm late last week, according to meteorologists.

“We’re looking at not only next couple weeks — probably through the middle of February. That’s what gets hard for livestock; it’s sort of a cumulative effect,” said David Streit, agriculture meteorologist with the Commodity Weather Group.

“You cut back on any weight gains during that time period, and you’ll have some outright losses, I would guess, in some of the more significant cold air outbreaks,” he said.

CME March feeder cattle fell to the lowest since Jan. 7, settling 1.775 cents lower at 142.925 cents/lb.

CME February lean hogs were up 0.8 cent, to 60.85 cents/lb., while more-active April hog futures declined 0.45 cent to 64.625 cents.

— Michael Hirtzer reports on commodity markets for Reuters from Chicago.

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Hog prices on Tuesday had dipped below their closely watched 200-day moving average and on Wednesday fell below the support level of lows notched late last month, triggering more selling.

“There’s a lot of technically based selling here … and the fundamentals are not there to support the cash market,” said Midwest Marketing Solutions broker Brian Hoops.

February hog futures declined by the most since Nov. 6, settling 2.1 cents lower at 60.05 cents/lb. (all figures US$). The April contract eased 1.875 cents, to 65.075 cents. Hogs in the top cash market of Iowa and southern Minnesota edged up 44 cents, to $51.91/cwt, according to the U.S. Department of Agriculture.

In the cattle market, live cattle futures climbed to life-of-contract highs for the third consecutive session, boosted by expectations that harsh winter weather moving into the Plains would hamper weight gains and shipments of the animals. Lower cattle weights reduce the overall supply of cattle.

Conditions at some feedlots already were muddy after heavy snowfall and rainfall last week in parts of the region. That limited demand for cattle moving into feedlots and could push up prices for fattened cattle sold out of the lots to slaughterhouses, traders said.

CME February live cattle, which reflect cattle that soon will be slaughtered, rose to a contract high of 127.95 cents/lb. before settling at 127.825 cents, up 0.875 cent.

Meanwhile, CME March feeder cattle declined to a one-week low 143.05 cents/lb., ultimately settling down 0.05 cent at 144.7 cents.

“For the first time in two years, we have a true weather market on our hands, with feedyards battling very poor feed conditions and more winter wheat on its way this week,” INTL FCStone said in a market note.

The National Weather Service warned of bitter-cold temperatures in a large part of the central U.S. The northern Plains would have high temperatures remaining below 0 F on Friday, nearly 25 degrees below normal, the NWS said.

— Michael Hirtzer reports on commodity markets for Reuters from Chicago.

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Technical buying and short-covering also buoyed cattle prices while lean hog futures finished narrowly mixed as some contracts were pressured by technical selling.

CME February live cattle settled up 1.525 cents at 126.95 cents/lb. after touching a contract peak of 127.1 (all figures US$). The April contract hit a contract high of 127.65 cents before finishing at 127.425, up 0.75 cent.

The five-session roll for investment funds tracking Standard + Poor’s Goldman Sachs Commodity Index had wrapped up after Monday’s session and some investors were caught short on Tuesday when prices climbed. That prompted even further gains as shorts were forced to buy back contracts.

“You definitely saw a short squeeze in the front,” S+P Global Platts Analytics analyst Peter Meyer said of cattle futures.

Heavy snow and cold temperatures were forecast later this week in the Plains cattle belt, which could impede transportation of animals and slow weight gains — potentially forcing packers to boost bids to ensure timely deliveries.

“I think biggest driver in cattle right now is weather,” one independent livestock futures trader said.

CME March feeder cattle were up 0.35 cent, to 144.75 cents/lb., rising from a roughly one-week low touched on Monday. Feeder cattle were supported in part by a drop in corn futures as cheaper feed cuts costs for fattening cattle and can boost demand for cattle.

In the hog market, the February contract climbed 0.3 cent, to 62.15 cents/lb., rebounding after declining the previous two sessions. However, other hog contracts including June futures were narrowly lower.

Traders continued to balance conflicting factors of ample U.S. hog supplies and expectations for increased U.S. pork exports to China later this year.

China, the world’s largest hog producer and pork consumer, has culled 916,000 pigs after around 100 outbreaks of African swine fever in the country, the agriculture ministry said as the disease continues to spread to new regions and larger farms.

— Michael Hirtzer reports on commodity markets for Reuters from Chicago.

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Feeder cattle futures also eased to the lowest since Jan. 7, while more actively traded live cattle notched small gains as traders awaited to see how beef packers would bid for cattle in cash markets this week.

Chicago Mercantile Exchange February lean hogs fell 0.8 cent, to 61.85 cents/lb. (all figures US$). The contract had jumped to a multiweek peak on Thursday before turning lower the past two sessions.

Expectations that China, where hog producers have culled herds in efforts to slow the spread of the African swine fever virus, might import pork from overseas markets including the U.S. helped prop up prices.

But U.S. cash hog prices have been weak so far this month while much of the data on exports typically published by the U.S. Department of Agriculture has been suspended because of the partial government shutdown. That has left traders in the dark and weighed on hog prices.

“It’s not that transparent but actions speak louder than words,” U.S. Commodities analyst Don Roose said, adding that prices for hogs and pork likely would rise if more supplies were being exported.

“The hog market technically had a breakout to the downside and we are getting some follow-through technical selling,” he added.

Forecasts for a severe winter storm to move through the U.S. Plains and Midwest regions — the second such storm in an as many weeks — underpinned livestock futures. As much as 15 inches (38 cm) of snow was possible in parts of the central U.S. by this weekend, according to meteorologist Radiant Solutions.

The weather could impede shipments of cattle, potentially forcing packers to pay higher prices. Cattle last week fetched mostly $124/cwt, in sales that were up $1 per ton from the previous week.

“The cattle market is on hold,” Roose said. “We have another storm in the forecast.”

CME February live cattle settled up 0.45 cent, to 125.425 cents/lb., and March feeder cattle down 0.5 cent to 144.4 cents.

— Michael Hirtzer reports on commodity markets for Reuters from Chicago.

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