Chicago | Reuters — Chicago Mercantile Exchange (CME) lean hog futures rose on Tuesday for a second straight day, supported by rising wholesale pork prices and a smaller weekly kill than a year ago, traders said.
CME April lean hog futures ended up 1.05 cents at 88.35 cents/lb., moving back up toward a life-of-contract high set on Feb. 25 at 90.675 cents after a roughly two-week consolidation (all figures US$).
“Spot supplies for meat, for hogs, have been fairly tight; that is reflected in prices. Pork prices overall continue to be pretty firm,” said Altin Kalo, agricultural economist for Steiner Consulting.
The pork carcass cutout value rose to $96.84/cwt, U.S. Department of Agriculture (USDA) data showed on Tuesday afternoon, the highest since Oct. 22. Meanwhile, USDA reported the week-to-date U.S. hog slaughter at 981,000 head, down from 986,000 for the same period a year ago.
“We’ve had back-to-back weeks of lower slaughter numbers, and that is reflected in the product markets,” Kalo said, noting USDA pegged wholesale pork belly prices on Tuesday near $170/cwt, a 4-1/2 month high.
Strong export demand for U.S. pork remained supportive. China, the world’s top pork consumer, has increased meat imports after its hog herd was devastated by the fatal pig disease African swine fever, first detected in the country in August 2018.
In cattle markets, CME live cattle futures inched higher for a third straight session, buoyed by expectations of rising beef prices and improving demand as the U.S. summer grilling season approaches.
CME April live cattle futures settled up 0.3 cent at 119.65 cents/lb.
CME April feeder cattle futures surged 2.4 cents to finish at 142.075 cents/lb.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago.