Chicago | Reuters — Chicago Mercantile Exchange hog futures surged their daily limit on Tuesday, rebounding from Friday’s life-of-contract lows on a round of bargain-buying and short-covering toward the end of the month, and as feed grain futures fell sharply, traders said.
“It really got grossly overdone to the bottom side,” said Dennis Smith, commodity broker for Archer Financial Services.
CME lean hogs for June delivery settled up 4.75 cents, the daily maximum, at 80.825 cents, and most-active July hogs ended up the 4.75-cent limit at 79.525 cents/lb. (all figures US$).
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As the harvest in southern Alberta presses on, a broker said that is one of the factors pulling feed prices lower in the region. Darcy Haley, vice-president of Ag Value Brokers in Lethbridge, added that lower cattle numbers in feedlots, plentiful amounts of grass for cattle to graze and a lacklustre export market also weighed on feed prices.
Daily limits in CME lean hog futures will widen to seven cents per pound for Wednesday’s session.
Stronger wholesale pork prices added support. The U.S. Department of Agriculture priced carcasses late Tuesday at $83.68 per hundredweight (cwt), up $1.48 from Friday.
Cattle futures also advanced, with CME live cattle and feeder cattle futures setting across-the-board contract highs, supported by strong cash cattle trade last week and firm beef prices.
CME August live cattle settled up two cents at 167.175 cents/lb. after setting a contract high at 167.25. August feeder cattle rose 3.85 cents to settle at 237.775 cents/lb. after notching a contract high at 238.55 cents.
Chicago Board of Trade corn futures fell 1.7 per cent, snapping a five-session climb and signaling softening costs for livestock feed.
— Reporting for Reuters by Julie Ingwersen in Chicago; additional reporting by Tom Polansek in Chicago.
