Chicago | Reuters — U.S. lean hog futures ended higher for the first time in three sessions on Friday on short covering and technical buying ahead of the extended Presidents Day holiday weekend, traders and analysts said.
Futures had been technically oversold after sinking to seven-month lows early this week under pressure from large hog and pork supplies and weak pork prices.
U.S. hog supplies, which had been running ahead of U.S. Department of Agriculture (USDA) forecasts early this year, now appear to be tightening, said Rich Nelson, chief strategist with Allendale Inc.
“We’re going to see a change in the hog supply over the next few weeks,” Nelson said. “In addition, we have some OK 2019 export sales on the books.”
USDA also reported this week that forward sales of U.S. pork for the 2019 season were running ahead of the government’s forecasted annual pace, although major importer China remains largely out of the market due to high import tariffs on U.S. shipments.
Chicago Mercantile Exchange April lean hogs ended 0.825 cent higher at 59.525 cents/lb. (all figures US$).
Traders are monitoring trade talks between the U.S. and China, the world’s largest hog and pork producer, as negotiations move to Washington next week. A trade deal between the two countries may include vows by China to buy U.S. agricultural products, including pork.
Live cattle futures were mostly weaker on Friday in light trading as the market awaited price direction from cash cattle markets in the U.S. Plains.
Beef packer margins remain positive, but packers will be buying some cattle for a shorter slaughter week next week as some plants will be closed on Monday for the Presidents Day federal holiday.
Trading may turn active later on Friday, when some traders expect sales to be at or near last week’s prices of $125/cwt.
Wholesale beef prices edged higher on Friday, with choice boxed beef quoted at $216.85/cwt, up 78 cents, and select cuts up 58 cents at $210.99, according to USDA.
April live cattle fell 0.2 cent to settle at 127.175 cents/lb.
Feeder cattle futures fell in light trading, with the actively traded March contract down 1.475 cents at 142.6 cents/lb.
CME agricultural markets will be closed on Monday in observance of the federal holiday and will reopen on Tuesday.
— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago.