U.S. livestock: CME hogs settle mostly weak on month-end positioning

Chicago / Reuters – Most Chicago Mercantile Exchange lean hog contracts closed weaker on Friday, after a volatile session highlighted by  investors squaring positions on the final trading day of the month, trader said.

August hogs finished up 0.125 cent per lb to 68.975 cents. October ended 0.150 cent per lb lower at 59.050 cents and December down 0.075 cent to 54.750.

Short-covering and bargain buying at times spiked CME hogs to session highs. Persistent bearish market fundamentals later pared earlier gains.

The bulk of cash hogs in the Midwest on Friday morning traded 50 cents per lb lower, said Midwest hog merchants.

Friday morning’s wholesale pork price, or cutout, dropped $1.32 per cwt from Thursday to $78.85, after pork belly prices fell more than $4, the U.S. Department of Agriculture said.

Record hog supplies and packing plant disruptions this week, including a floater holiday on Monday, hit cash and pork belly prices hard this week, a trader said.

Analysts and traders foresee a seasonal cash and pork cutout price turnaround as grocers buy pork to feature during the Sept. 5 Labor Day holiday.

Allendale Inc President Paul Georgy also pointed out that various institutions, such as the government in preparation for school lunch programs, tend to start buying meat in early August.

Live cattle ends weaker

CME live cattle ended moderately lower on profit-taking following strong market advances earlier this week, traders said.

They said anticipation of higher market-ready, or cash, cattle prices by late Friday evening cushioned market losses.

August live cattle ended 0.250 cent per lb lower at 113.075 cents, and October closed 0.375 cent lower at 111.725 cents.

After CME live cattle futures closed, a small number of cash cattle in Texas and Kansas moved at $116 per cwt, up $1 from a week ago, said feedlot sources. They said other sellers there and elsewhere in the U.S. Plains are holding out for at least $118.

Healthy margins and fewer cattle for sale than last week underpinned cash prices that encountered upward pressure from ample cattle and beef supplies.

Cattle prices in recent weeks have fallen, but retail prices have not reflected that decline, said Georgy.

The morning’s choice beef price dropped 85 cents per cwt from Thursday to $197.91. Select cuts were up 15 cents to $189.86, the USDA said.

Weak live cattle futures pressured CME feeder cattle contracts. August closed down 0.425 cent per lb to 140.050 cents.

Editing by Bill Rigby

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