Chicago Mercantile Exchange hog futures on Tuesday rose for the fifth straight session helped by higher prices for cash hogs and wholesale pork, traders and analysts said.
U.S. Department of Agriculture data showed the average hog price Tuesday afternoon at the closely-watched Iowa/Minnesota market at $100.61 per hundredweight (cwt), up 85 cents from Monday (all figures US$).
USDA reported the wholesale pork price on Tuesday at $105.35/cwt, up 79 cents from Monday. The higher price was due toy higher prices for pork bellies, which are processed into bacon.
Packers are buying hogs for this week’s slaughter. Processors who were closed on Monday for a floater holiday will make up the downtime on Saturday.
Pork demand received an added boost from cooler-than-usual summer weather in parts of the country, which has been conducive for outdoor barbecues.
Nearby hog futures’ discount to CME’s hog index, which was at 100.68 cents, encouraged buyers. However, spot-August hog futures moved to a contract high of 101.00 cents in after-hours trading.
Spot August hogs closed at 100.55 cents/lb., or up 0.325 cent. Most-actively traded October ended at 86.45 cents, up 0.95 cent.
Beef prices lift live cattle
CME live cattle gained modestly in reaction to an upturn in cash beef prices on Tuesday, traders and analysts said.
USDA on Tuesday afternoon quoted the wholesale price of choice beef at $187.17/cwt, up 71 cents from Monday. Select cuts rose 36 cents to $180.90.
“The higher beef quote was supportive. But a two- to three-day uptrend is needed to confirm beef prices have bottomed out,” a trader said.
Futures’ gains could underpin cash cattle prices for this week, the trader said. But packers will be leery about aggressively bidding for supplies given their tighter margins, he said.
No cash cattle bids or asking prices were reported by feedlot sources.
Last week, cash cattle in Texas moved at $119/cwt and at mostly $119 in Kansas, with a few at $120, said feedlot sources. Much of the Nebraska cattle fetched $120.50 then.
August live cattle futures closed up 0.375 cent at 120.925 cents/lb. and October closed at 124.675 cents, up 0.125 cent.
Firm live cattle futures lifted CME feeder cattle.
August feeders closed at 154.25 cents, up 0.275 cent/lb., while September closed at 157.65 cents, up 0.65 cent.
— Theopolis Waters reports for Reuters from Chicago.