LIVESTOCK: CME hog futures slide on weaker cash, pork prices

Reuters — Chicago Mercantile Exchange hog futures on Thursday finished lower, pulled down by softer cash hog and wholesale pork prices, traders said.

August finished 1.375 cents per lb lower at 123.200 cents, and October at 107.900, 2.550 cents lower.

The average price of market-ready, or cash, hogs Thursday morning in the eastern Midwest, fell $1.11 per hundredweight (cwt) from Wednesday to $123.68, according to the U.S. Department of Agriculture.

USDA data showed the morning’s wholesale pork price at $131.95 per cwt, down 65 cents from Wednesday largely due to the nearly $8 slump in pork belly costs.

Some processors bought enough hogs for the rest of this week’s production, which further weighed on cash values.

Also, mild mid-summer temperatures are allowing hogs to gain weight quickly, which is helping to offset tight supplies caused by the virus that has killed millions of pigs since last year.

Bargain hunting and futures’ discounts to CME’s hog index, at 132.04, helped cushion market losses and might support hog trading months on Friday, traders said.

Live cattle finish firm

CME live cattle futures retained a portion of the session’s earlier gains, despite a rash of profit-taking that briefly landed some contracts in negative territory.

August live cattle finished up 0.500 cent per lb to 156.550 cents, and October gained 0.050 cent to 158.050.

Futures spiked at first, driven by record-high prices for slaughter-ready, or cash, cattle after packers found themselves short of supplies.

A few cash cattle in Kansas hit an all-time high of $162 per cwt, up $7 from last week, feedlot sources said. Cash cattle in Nebraska fetched $162 per cwt, $6 to $7 higher than a week ago, they said.

Still, some investors pocketed profits before Friday’s government monthly Cattle-On-Feed report, but later placed long bets after beef cutout prices jumped to all-time highs.

Analysts expect Friday’s report to show fewer cattle entered feedlots last month than a year ago as ample pastures allowed ranchers to fatten animals outside of feeding pens longer.

Thursday morning’s wholesale price, or cutout, for choice beef surged $3.28 per cwt from Wednesday to a record $255.87. Select beef climbed $3.76 to a new top of $252.47, the USDA said.

Less product flowing into retail channels helped boost the cutout, a trader said. He also cited “perfect” grilling weather so far in parts of the country for beef price strength.

And, he said processors upped the price of beef at wholesale to counter higher prices for cattle.

CME feeder cattle closed mixed, supported by firm live cattle contracts but pressured by profit-taking.

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