Chicago | Reuters — U.S. lean hog futures climbed more than one per cent on Monday, rising on technically driven bargain buying after prices fell on Friday to a five-month low, traders and analysts said.
Hogs halted a four-session streak of declines while live cattle futures edged higher to notch a 1-1/2-week high on the Chicago Mercantile Exchange.
“If you look at the chart, we’ve gotten down to support where it holds,” CHS Hedging analyst Steve Wagner said of hogs.
The hog market had been under pressure for weeks due to abundant supplies and declining prices for both pork and hogs in cash markets.
Most-active CME April hog futures finished up 0.65 cents at 59.075 cents/lb., gaining for only the third time in the last 15 sessions.
“There’s no bullish scenario for hogs. Demand is good but we’re clearly not getting a bump in exports,” Wagner added.
Top importers Mexico and China each have tariffs on U.S. pork, impeding shipments. Pork packers and hog farmers both were hoping that China would ramp up purchases this year due to the African swine fever virus that has forced farmers there to cull herds.
The cattle market has been on more solid ground, with beef exports booming while relatively big cattle supplies were in balance with robust demand from beef packers.
CME April live cattle settled up 0.375 cent at 128.3 cents/lb., hovering just below the contract peaks reached on Jan. 31 (all figures US$). CME March feeder cattle futures were 0.575 cent higher at 144.675 cents per pound.
Cattle were supported in part by news that beef packers late on Friday and on Saturday bought cattle in the southern U.S. Plains at $125/cwt, up about $1 from deals in the previous week.
The U.S. Department of Agriculture confirmed that more than 2,000 cattle sold for an average price just under $125.
— Michael Hirtzer reports on commodity markets for Reuters from Chicago.