Chicago | Reuters — Chicago Mercantile Exchange lean hog futures declined on Wednesday, snapping a three-session advance, pressured by a discounted cash hog market and declining wholesale pork prices, traders said.
CME June lean hog futures settled down 2.325 cents at 84.875 cents/lb. and the July contract fell 2.575 cents to end at 85.55 cents (all figures US$).
Cash hogs continue to trade at a significant discount to futures. The CME lean hog index, a two-day weighted average of cash hog prices, rose by 67 cents, to $77.17 per hundredweight (cwt), its highest since March 22, but still the equivalent of nearly $8/cwt below futures.
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On the pork side, the U.S. Department of Agriculture (USDA) priced the carcass cutout late Wednesday at $83.07/cwt, down 68 cents from Tuesday.
“Until the cash (market) can move up more aggressively and the cutout can move up, the upside is limited,” said Don Roose, president of Iowa-based U.S. Commodities.
Traders await USDA’s weekly export sales report on Thursday for a gauge of export demand for U.S. pork and beef.
CME live cattle futures closed mixed, with the most-active nearby contracts finishing higher and back months drifting lower. June live cattle settled up 0.95 cent at 164.825 cents/lb., and benchmark August futures ended 0.65 cent higher at 163.125 cents.
CME August feeder cattle finished down 0.325 cent at 231.15 cents/lb.
Boxed beef prices continued to retreat, with choice cuts priced on Wednesday afternoon at $298.15/cwt, down $1.32 from Tuesday, and select cuts at $282.89/cwt, down $1.46.
Ahead of Friday’s monthly USDA Cattle on Feed report, analysts surveyed by Reuters on average expected the government to report the number of cattle in U.S. feedlots as of May 1 at 96.5 per cent of a year ago, or about 11.6 million head.
Analysts on average estimated April feedlot placements at 96.3 per cent of a year ago and April marketings at 90.3 per cent of a year ago.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago.
