Chicago | Reuters — Chicago Mercantile Exchange lean hogs on Wednesday slid to a one-month low, pressured by concerns over possibly more supplies ahead, traders said.
July ended down 0.475 cent/lb. to 81.575 cents (all figures US$). Most actively traded August finished 2.625 cents lower at 80.625 cents.
The government’s quarterly hog report in late June was bearish because of the surprising number of hogs that are going to come down the road, said independent livestock futures trader Dan Norcini.
Futures followed the path of least resistance after July and August fell below their respective 100-day moving average support levels of 81.87 and 81.57 cents.
Traders sold deferred hog contracts with the view that less-expensive corn might motivate farmers to expand their herds.
Investors are tracking cash hog prices as processors gather supplies for a Saturday kill close to 100,000 head as plants make up for closures on Monday’s Fourth of July holiday.
Cash hogs in the Midwest Wednesday morning traded mostly steady to up 50 cents/cwt, according to regional hog dealers.
Lower live cattle settlement
Profit-taking and technical selling weighed on CME live cattle futures ahead of cash prices by week’s end, traders said.
August ended down 0.85 cent to 112.8 cents, and October closed 0.9 cent lower at 113.1 cents.
Both contracts ended below their 10-day moving averages of 112.94 and 113.05 cents, respectively.
CME live cattle contracts slumped despite encouraging wholesale beef values and futures’ steep discount to last week’s cash prices.
The morning’s choice beef price was at $209.78/cwt, 95 cents higher than on Tuesday. Select cuts jumped $2.18, to $196.97, the U.S. Department of Agriculture said.
Wednesday morning, packers in Kansas bid $119/cwt for cash cattle in response to sellers there and Texas that priced them at $125, said feedlot sources.
Last week, market-ready, or cash, cattle in the U.S. Plains brought $120-$122/cwt.
Investors look for processors to pay about the same as last week for supplies needed for next week’s full week of production after the holiday.
Cash prices may have bottomed out after ranchers aggressively move cattle ahead of schedule, which means there is less of a chance of them backing up later, said West Oak Commodities analyst Tom Tippens.
Lower corn prices, which reduce input costs for feedlots operators, lifted CME feeder cattle futures. August feeders closed 0.5 cent/lb. higher at 144.575 cents.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.