U.S. livestock: CME lean hogs end higher, live cattle narrowly mixed

Chicago | Reuters — Chicago Mercantile Exchange lean hogs ended higher on Friday, supported by fund buying, anticipation of high cash prices and tight hog supplies, traders said.

Lean hog futures rose more than one per cent on the day as consumer demand for grilling season grows even as pork and beef retail prices rise, said Dan Norcini, an independent livestock trader.

July lean hogs touched their three-cent trading limit, boosted by technical buying and expectations of increasing cash hog prices.

“The cash hog market has stopped going down and the (pork) cutout has gone up. The seasonal rally may finally be kicking off, just a little bit later than usual,” said Norcini.

The U.S. Department of Agriculture data showed pork wholesale prices, or the cutout, at $119.59 per hundredweight (cwt), up $1.38 from Thursday (all figures US$).

Less availability of market-ready hogs in the wake of the piglet-killing porcine epidemic diarrhea virus (PEDv) has forced some packing plants to reduce slaughter volume.

USDA data showed estimated hog slaughter down 4.2 per cent on a year-to-date basis compared with last year.

June hogs, which expire mid-month, ended up 1.42 per cent or 1.6 cents per pound higher at 114.575 cents. July closed up 2.2 per cent or 2.8 cents/lb. at 124.975.

Cattle ends mixed

CME live cattle ended narrowly mixed on Friday. The front-month June contract was supported by expected higher prices in the cash cattle market.

Bids for cattle in the cash market were renewed at $142/cwt in Texas. There was talk Kansas traded lightly on Thursday at $145 to $145.50/cwt, which was about $2 higher than the previous week.

Lighter slaughter volume also lent support to live cattle futures, traders said.

USDA estimated year-to-date cattle slaughter at 6.3 percent lower than last year.

Weak wholesale beef prices dragged on the CME live cattle future values.

Friday morning’s wholesale choice beef price slipped $1.05/cwt from Thursday to $239.94. Select cuts fell 73 cents to $221.16, according to U.S. Department of Agriculture data.

June, which expires at the end of the month, ended at 140.125 cents, up 0.625 cent. August closed at 141.3 cents, down 0.025 cent.

CME feeder cattle shrugged off pressure from rising U.S. corn futures. Chicago Board of Trade July corn rose more than two per cent on Friday.

August feeder cattle ended at 200.525 cents/lb., up 0.7 cent, while the September contract closed up 0.625 cent at 200.875 cents/lb.

— Meredith Davis reports on ag commodity markets for Reuters from Chicago.

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