Chicago | Reuters — Chicago Mercantile Exchange lean hogs closed higher on Tuesday in response to the morning’s wholesale pork price bounce, traders said.
December and February closed up 0.35 cent per pound at 89.9 cents and 89.45 cents, respectively (all figures US$).
Tuesday morning’s wholesale pork price jumped $2.97 per hundredweight (cwt) from Monday to $96.76.
Veterans Day plant closures, and transportation snarls caused by wintry weather in the upper U.S. Midwest, reduced the amount of pork for retailers and might support cash prices, an analyst said.
The U.S. Department of Agriculture estimated Tuesday’s hog slaughter at 394,000, down 38,000 from last week.
Hogs in the Midwest sold mostly steady, regional dealers said.
Packers may ramp up Saturday’s kill to make up for Tuesday’s holiday downtime and animals that may have backed up on farms as result of the storm, traders said.
Funds trading CME livestock at times sold December long positions and mainly bought February in a procedure known as the “roll” by followers of the Standard + Poor’s Goldman Sachs Commodity Index (S+PGSCI).
Tuesday was the third of five days for the S+PGSCI roll process.
Mixed live cattle
CME live cattle finished mixed, with December futures tracking last week’s cash price while profit-taking pressured the February contract.
December closed up 0.125 cent/lb. at 167.25 cents, and February fell 0.125 cent to 168.4 cents.
Investors look for market-ready, or cash, cattle to trade about steady with last week’s mostly $167/cwt sales.
Packers may book a few cattle before the onset of colder weather next week that could slowdown animal weight gains, a trader said.
Unprofitable margins and tepid wholesale beef demand could limit spending for cash cattle, he said.
The morning’s choice wholesale beef price rose $1.08 per cwt from Monday to $250.22. Select slipped 14 cents to $239.01, USDA said.
Profit-taking and firm corn prices pressured CME feeder cattle futures.
November closed down 0.175 cent/lb. at 238.85 cents, and January was at 232.65 cents, down 0.1 cent.
— Theopolis Waters reports on livestock futures markets for Reuters from Chicago.