Chicago | Reuters — Chicago Mercantile Exchange (CME) lean hog futures ended higher on Wednesday, led by firming cash hog prices and rising wholesale pork prices, traders said.
CME April lean hog futures ended up 0.425 cent at 88.775 cents/lb., inching closer to a contract high set on Feb. 25 at 90.675 cents (all figures US$).
“The hog market continues to find support from really strong cash prices,” said Doug Houghton, analyst at Brock Capital Management. The CME’s lean hog index, an indication of cash markets, has been climbing since early January and reached 86.08 cents on Wednesday.
“As long as the cash index keeps rising, there is not much downside,” Houghton said.
Pork prices have been firming as well. The U.S. Department of Agriculture (USDA) reported the pork carcass cutout value at $97.67/cwt on Wednesday, the highest since October.
At the same time, the hog slaughter pace has slowed compared to last year. USDA reported the week-to-date U.S. hog kill at 1,465,000 head, down from 1,473,000 in the same period a year ago.
Traders await Thursday’s weekly USDA export sales report. Last week, the government pegged U.S. pork sales in the week to Feb. 25 at 59,600 tonnes, up 68 per cent from the prior four-week average.
CME live cattle futures closed lower on a mix of technical selling, lacklustre cash trade and softening beef prices. Market-ready cattle traded lightly in the southern Plains at $113-$114/cwt, roughly steady with last week, traders said.
CME April live cattle futures settled down 0.875 cent at 118.775 cents/lb. and April feeder cattle futures ended down 0.35 cent at 141.725 cents/lb.
The cattle markets were underpinned by a setback in corn futures, signaling cheaper feed costs, and forecasts for storms in Colorado and western Nebraska that could slow the movement of animals.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago.