Chicago | Reuters — Chicago Mercantile Exchange lean hog futures ended higher on Friday as the market moved up toward cash prices, analysts said.
October lean hogs closed 0.85 cent stronger at 96.9 cents/lb. (all figures US$). The contract earlier in the session rose to 96.925 cents, its highest price since Aug. 23. Most-active December hogs ended up 0.325 cent at 87.975 cents/lb.
Futures prices became too low compared to the cash market and are now rising to narrow the gap, said Don Roose, president of U.S. Commodities.
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Margins for pork processors continued to improve, jumping to $6.95 per hog from $2.45 on Thursday and a loss of $0.20 a week ago, livestock marketing advisory service HedgersEdge.com said.
The U.S. Department of Agriculture quoted the U.S. pork carcass cutout value at $106.39 per cwt, up $0.54 from Thursday.
In the beef market, select cuts of boxed beef fell by $3.30, to $226.65/cwt, while choice cuts edged up six cents, to $252.40/cwt, USDA said.
CME October live cattle slipped 0.125 cent to close at 145.5 cents/lb. December live cattle closed down 0.35 cent at 150.975 cents/lb. The was a setback after the December contract on Thursday touched its highest price since Aug. 17 at 151.65 cents.
Uncertainty about beef demand weighed on cattle futures, even though producers are reducing the size of the U.S. herd, Roose said. Livestock traders worry that a recession could dent demand for high-priced beef.
“The supply side is bullish, but what’s the demand side particularly with the beef the most expensive cut out there?” Roose said.
On Wall Street, major indexes closed lower as investors’ fears about the prospects for a global recession intensified while they also prepared for a massive U.S. interest rate hike from the Federal Reserve.
CME feeder cattle futures, meanwhile, finished mixed. October feeders rose 0.325 cent to close at 181.25 cents/lb., and November feeders fell 0.025 cent, to 182.75 cents.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.
