CHICAGO, July 30 (Reuters) – Chicago Mercantile Exchange hogs on Wednesday settled lower, pressured by weak prices for slaughter-ready, or cash, hogs and pork at wholesale, traders said.
August finished 2.300 cents per lb lower at 119.150 cents, and October was down 2.375 to 103.700.
The Wednesday afternoon average price of hogs in Iowa/Minnesota dropped 92 cents per hundredweight (cwt) from Tuesday to $121.12, the U.S. Department of Agriculture said.
USDA data showed the afternoon’s wholesale pork price at $130.23 per cwt, down 90 cents from Tuesday.
Mild mid-summer weather allowed hogs to stay heavier than a year ago, adding more pork tonnage to the retail sector, analysts and traders said.
Cash prices suffer as hog farmers move animals ahead of schedule as their prices grind lower, they said.
From Monday to Wednesday, packers processed 1.198 million hogs, up 33,000 from last week and 22,000 more than a year ago, according to USDA.
CME hog market losses mounted after futures drifted below Tuesday’s lows, which triggered sell stops.
Fund liquidation surfaced after the December contract slipped beneath the 100-day moving average of 94.64 cents.
Possible short-covering and bargain hunting may help mitigate further losses on Thursday, the last trading day of July.
LIVE CATTLE GAIN GROUND
CME live cattle closed higher after wholesale beef values set another record, backing expectations for steady or firm cash returns for this week, traders said.
Last week, cash cattle in the U.S. Plains fetched a record high $162 to $165 per cwt.
Wednesday morning’s choice wholesale beef price rose to $263.03, surpassing Tuesday’s record. Select beef surged to $261.50, topping the previous day’s high, USDA said.
“Beef demand has been so good, because the weather has been so good,” said John Kleist, analyst with EBOTTrading.com. He cited the lack of hot summer weather that usually hurts demand for heavy meals.
Packers also upped the cost of beef they charge grocers to offset higher cattle prices. And, overall tight cattle supplies resulted in less beef available to retailers.
Cargill Inc said on Wednesday it plans to close its Milwaukee beef-processing plant on Friday, because of the scarcity of cattle as the size of the U.S. herd has fallen to its smallest in 63 years.
Futures may encounter volatile trading on Thursday as market participants square positions on the last trading day of the month.
August live cattle closed up 1.075 cents per lb at 159.850, and October 0.850 cent higher at 159.925.
CME feeder cattle hit a new high for a third consecutive session, lifted by strong live cattle futures and prices for feeder cattle in local markets.
August finished 1.600 cents per lb at 223.025 and September at 224.200, 1.750 higher.