Chicago | Reuters — Chicago Mercantile Exchange lean hogs finished higher on Monday on strong cash prices and the resumption of cargo loading following Friday’s West Coast port labour agreement, traders said.
CME hogs drew more support from the dockworker deal because the U.S. exports more pork than beef and poultry.
Monday morning’s average market-ready (cash) hog price in Iowa/Minnesota surged $3.29 per hundredweight (cwt) from Friday to $63.01, the U.S. Department of Agriculture said (all figures US$).
Plunging temperatures and wintry weather from the Midwest to the Atlantic states curbed meat demand and snarled livestock deliveries to packing plants in the area.
Despite futures’ rally, some investors were reluctant to proclaim that cash prices have bottomed out seasonally.
A surplus of hogs remain and there has yet to be a significant increase in product prices, said Craig VanDyke, analyst with Top Third Ag Marketing.
USDA data showed the morning’s wholesale pork price at $72.48/cwt, up 98 cents from Friday.
CME lean hogs’ premium to the exchange’s hog index for Feb. 19 at 60.27 cents limited advances.
April futures closed up 0.925 cents, to 68.325 cents/lb., and May 0.95 cent higher at 78.25 cents.
Cattle futures drop
CME live cattle contracts posted losses on sell stops and last week’s lower cash prices, traders said.
February closed down 0.675 cent/lb. to 156.025 cents, and April 1.425 cents lower at 147.1 cents.
Last week, cash cattle the U.S. Plains fetched $158-$160/cwt, as much as $4 lower than the week before, feedlot sources said.
Packers curtailed slaughter rates to lessen cash spending while boosting wholesale beef prices, traders and analyst said.
Monday morning’s choice wholesale beef price rose 45 cents, to $240.76/cwt, from Friday. Select cuts rose $1.70, to $239.49, based on USDA data.
Beef demand could weaken as grocers buy product hand-to-mouth during Lent while eying plentiful less-expensive pork and chicken.
Futures were further pressured by Friday’s USDA Cattle-On-Feed report that showed more animals placed in feedyards last month than expected.
Investors also cited Friday’s government’s cold storage report in which the record-high January beef inventory partly reflected West Coast port delays.
CME feeder cattle closed in sympathy with lower live cattle futures.
March closed 1.1 cents/lb. lower at 198.075 cents, and April down 1.3 cents, to 197.05 cents.
— Theopolis Waters reports on livestock futures markets for Reuters from Chicago.