Chicago | Reuters — U.S. cattle and hog futures were mostly higher on Wednesday, with feeder cattle rallying about one per cent on short-covering following recent lows, traders msaid.
Several Chicago Mercantile Exchange lean hog contracts fell to lifetime lows before trimming losses as traders squared up their positions ahead of a quarterly U.S. hog and pig supply report due on Friday.
Analysts polled by Reuters expected the U.S. Department of Agriculture to say the U.S. hog herd expanded about 1.2 per cent to 70 million head as of Sept. 1.
Both hogs and cattle have been dragged down by abundant livestock supplies and big stockpiles of beef, pork and poultry.
Most-active CME December live cattle settled 0.5 cent higher at 103.625 cents/lb., recouping a portion of their three cents in losses on Tuesday. Live cattle in U.S. Plains cash markets traded at $104/cwt, down from $105-$107 last week, feedlot sources said.
CME October feeder cattle settled 1.175 cents higher at 128.025 cents/lb., surging from their earlier life-of-contract low of 126.175 cents for their biggest daily gains in about two weeks.
The CME Group’s index of the cash feeder cattle market reached 136.68 cents, and the index’s big premium to futures triggered a round of short-covering, said Schwieterman Inc. broker Domenic Varricchio.
“There was no natural hedger or seller down there (at the futures low). As soon as those shorts wanted to cover, up it went,” Varricchio said.
Most-active December lean hog futures settled up 0.25 cents at 46.7 cents/lb., rebounding from their contract low of 46.15 cents.
“There’s no sign futures are bottoming, but we may look to lock in some hedge profits ahead of Friday’s USDA report, which is expected to show ongoing herd expansion,” analyst firm Brock and Associates said in a note to clients.
— Michael Hirtzer reports on ag commodity markets for Reuters from Chicago.