Chicago | Reuters –– Chicago Mercantile Exchange (CME) hogs settled sharply lower on Monday pressured by technical-selling and profit-taking, traders said.
Front-month July traded through both the 10-day and 20-day moving average. July also traded at a premium to the CME cash index of 114.75 cents per hundredweight (cwt), which also dragged on the market (all figures US$).
Midwest hog dealers said cash market prices traded higher early on Monday, but advances in the cash market did little to slow losses in the U.S. lean hogs futures, traders said.
July fell more than two per cent, or 2.75 cents/cwt, to 124.25 cents. The August contract ended down its three-cent daily trading limit at 128.275 cents/cwt.
Market analysts predicted porcine epidemic diarrhea virus, a deadly piglet virus, would constrain the amount of market-ready hogs during the spring and summer months.
“Total pork production is not coming down like we thought it would,” said Dan Norcini, an independent livestock futures trader. “The record heavy weight hogs, some as much as 10 pounds heavier, are increasing pork tonnage even if there are fewer hogs,” he said.
The U.S. Department of Agriculture data on Monday morning showed wholesale pork prices at $123.21/cwt, up $1.53 from Friday.
Beef prices support live cattle
CME live cattle closed slightly lower on Monday, just off the its recent high, as a higher wholesale beef prices limited losses, traders said.
Front-month June, which expires at the end of the month, ended at 147.45 cents, down 0.15 cent. August closed at 146.45 cents, down 0.175 cent.
The morning’s wholesale choice beef price, or cutout, rose $1.42/cwt from Friday to $233.29. Select cuts gained 29 cents to $223.89, the U.S. Department of Agriculture said.
Reduced slaughter pace and consumer demand for grilling season supported higher wholesale prices, a trader said.
USDA estimated Monday’s slaughter at 116,000 head, down 7,000 head from the pervious year.
Last week, cash cattle in Texas and Kansas fetched $148/cwt, $3 higher than a week ago. Cash cattle in Nebraska moved at mostly $149 to $150, up $3 to $4 from last week.
CME feeder cattle touched a new high on Monday, supported by weak U.S. corn futures while lower U.S. live cattle futures limited gains, traders said.
August finished 0.55 cents/lb. higher at 208.7 cents, and September was at 209.5, up 0.775 cent.
— Meredith Davis reports on ag commodity markets for Reuters from Chicago.