Chicago | Reuters — Chicago Mercantile Exchange lean hogs closed up more than two per cent Wednesday on short-covering after a third straight session of wholesale pork price gains, traders said.
Spot October closed 1.8 cents/lb. higher at 69.775 cents, and December up 1.7 cents at 64.675 (all figures US$).
Wednesday morning’s wholesale pork price (cutout), at $86.75/cwt, rose 58 cents from Tuesday, lifted by a $2.56/cwt jump in pork bellies, based on U.S. Department of Agriculture data.
The Labour Day holiday falling a week later than last year helped sustain bacon demand for everything from salads to the summer season’s bacon, lettuce and tomato sandwiches, a trader said.
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U.S. livestock: Cattle futures come down from highs
Cattle futures on the Chicago Mercantile Exchange were weaker on Monday, coming down from recent highs.
The October hog contract usually trends upward as retailers restock meat cases after Labor Day while gearing up for National Pork Month promotions in October, he said.
Futures’ price discounts to the exchange’s hog index for Aug. 31 at 77.23 cents contributed to advances.
But investors were skeptical whether the day’s rally would last based on lower cash prices, holiday plant closures and expectations of a seasonal supply buildup ahead.
There is uncertainty about increased hog numbers this fall due to already hefty supplies, said Brock Associates analyst Doug Houghton.
USDA reported Wednesday morning’s average market-ready (cash) hog price in Iowa/Minnesota had fallen $1.10 per cwt from Tuesday to $71.70.
Live cattle down, off lows
Fund selling and anticipation of soft cash prices later this week initially sank CME live cattle to a 15-month bottom for a third time in six sessions, traders said.
But futures came off those lows thanks to late-day speculative buying, they said.
October ended down 0.1 cent/lb. at 141.225 cents, and December 0.3 cent lower at 143.325 cents.
On Wednesday, cash cattle bids in Texas held at $144/cwt, while Kansas bids slipped to $142 to $143 from $144 on Tuesday, feedlot sources said. Sellers in both states priced cattle at $146 to $148, down from $148 to $150 earlier this week, they said.
Last week, packers in the U.S. Plains paid $144 to $147 for supplies.
Processors need fewer cattle given tepid beef demand and one less day to process livestock during the holiday.
The morning’s wholesale choice beef price dipped 25 cents to $240.96/cwt from Tuesday. Select cuts gained 10 cents, to $230.54, USDA said.
Feeder cattle at the exchange drew support from short-covering and steady to $2 higher cash feeder cattle prices.
September ended 0.475 cent/lb. higher at 200.75.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.
