Aside from spot-June Chicago Mercantile Exchange hog futures, remaining contracts fell on profit taking, traders and analysts reported Friday.
Most hog contracts slid despite higher cash hog and wholesale pork prices.
“Packers couldn’t seem to get enough hogs around them because of seasonally tighter-than-expected supplies,” a trader said.
Government data showed the average hog price on Friday morning in the closely-watched Iowa/Minnesota market at $102.54 per hundredweight (cwt), up 28 cents from Thursday (all figures US$).
Friday morning’s mandatory wholesale pork price report, calculated on a plant-delivered basis, was at $102.70/cwt, up $2.01 from Thursday, according to the U.S. Department of Agriculture.
Hog and pork price advances supported the spot-June contract before it expired.
CME hogs gained for a 12th straight day and ended up 4.3 per cent for the week.
CME spot-June hogs settled up 0.725 cents per pound, to 102.3 cents.
July, the new lead month, ended at 98.025 cents or 0.625 cent lower, and August settled down 0.55 cent to 96.75.
Processors are cutting slaughter rates to counter tight supplies and stabilize their falling margins.
USDA estimates this week packers will process 1.949 million hogs, 69,000 less than a week ago and 10,000 less than a year ago.
HedgersEdge.com calculated U.S. pork packer margins on Friday at a negative $13.25 per head, compared with a negative $9.45 on Thursday and negative $6.90 a week earlier.
Cattle slide with beef
Initial lower live cattle prices and eroding wholesale beef values dropped CME live cattle futures, traders and analysts said.
As of Friday, fewer than 1,000 head of cattle sold in Texas at $120/cwt, $2 lower than last week, feedlot sources said. Cash bids elsewhere in the state and the Plains held at $120 versus $124 asking prices, they said.
USDA’s Friday morning data showed the wholesale price of choice beef down 48 cents per cwt from Thursday to $200.15; select cuts dropped 82 cents to $183.55.
Traders believe packers are focusing more on pork than beef because it is being featured more aggressively at the meat case, said Commodity Analytics president Mike Zuzolo.
Wholesale beef prices have come down from their record high of $211.37/cwt before the May 27 U.S. Memorial Day holiday, but remain relatively high compared to pork.
Live cattle at the CME ended the week down 0.65 per cent.
June live cattle finished 0.85 cent/lb. lower at 119 cents, and August dropped 0.75 cent to 118.325.
Live cattle futures’ losses and technical selling sank CME feeder cattle futures.
Still, for the week, CME feeder cattle ended up 0.75 per cent.
Spot August settled down 2.075 cents/lb. to 143.4 cents, and September was at 146.225 cents, 1.525 cents lower.
— Theopolis Waters reports for Reuters from Chicago.