Chicago | Reuters — Chicago Mercantile Exchange lean hog futures on Tuesday gained for a third straight session, fueled by recently improved prices for slaughter-ready, or cash, hogs and wholesale pork values despite plentiful supplies, said traders.
Fund buying developed after December and February futures opened above their respective 20-day moving averages of 42.51 and 49.69 cents/lb. (all figures US$).
December lean hogs finished 1.425 cents/lb. higher at 44.625 cents, and February 1.675 cents higher at 51.375 cents.
The industry may be looking beyond the huge amount of available meat and unresolved issue of late fourth-quarter hog slaughter capacity, said Livestock Marketing Information Center director Jim Robb.
Monday and Tuesday’s combined U.S. hog slaughter totaled 885,000 head, 23,000 more than a year earlier, according to U.S. Department of Agriculture estimates.
Hogs are readily available due to cooler fall weather and highly nutritious new-crop corn, which causes animals to gain weight quicker, said traders.
They added that grocers are filling short-term product needs as the end of October Pork Month approaches.
Nonetheless, some believe abundant numbers of heavier hogs will outstrip product demand around early November.
Cattle futures retreat
CME live cattle ended lower for the first time in four days, weakened by profit-taking and caution in advance of cash prices by Friday, said traders.
October live cattle closed 0.4 cent/lb. lower at 102.725 cents, and most actively traded December down 0.35 cent to 103.9.
Bullish traders believe that current futures prices, slipping but still substantial packer profits, and Tuesday morning’s wholesale beef price hike will support cash prices.
Contrarians preferred to wait for the results of Wednesday morning’s sale of more than 12,000 cattle on the Fed Cattle Exchange.
Last week, packers in the U.S. Plains purchased cash cattle for mostly $99 to $100 that fetched $97 to $98 in the previous week.
Average beef packer margins for Tuesday were a positive $136.20 per head, down from a positive $141.10 on Monday and a positive $147.20 a week ago, as calculated by HedgersEdge.com.
Tuesday morning’s choice beef price climbed $1.38/cwt from Monday, to $182.36. Select cuts rose $1.48, to $168.65, USDA said.
CME feeder cattle ended mixed, pressured by live cattle market weakness, but supported by higher cash feeder cattle prices.
October feeders, which will expire on Thursday, ended 0.825 cent per pound lower at 121.55 cents. Most actively traded November finished up 0.125 cent to 122.65.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.