Chicago | Reuters — Chicago Mercantile Exchange lean hogs drifted to a three-month bottom on Monday, in response to lower cash and wholesale pork prices, said traders.
Sell stops and deferred-month future’s premiums to CME’s hog index for Dec. 7 at 65.48 cents further weighed on contracts.
December hogs, which will expire on Dec. 14, ended down 0.075 cent per pound at 63.6 cents (all figures US$). Most actively-traded February closed 1.825 cents lower at 67.025 cents.
Monday afternoon’s cash hog price in Iowa/Minnesota averaged $59.24/cwt, 49 cents lower than on Friday, the U.S. Department (USDA) said.
USDA data showed the average wholesale pork price fell $2.01/cwt to $81.69 from Friday, mostly led by $7.48 lower pork bellies.
Last week’s heavier hog weights confirmed that animals backed up on farms coming into a period when packers will close plants during the Christmas and New Year’s holidays, said Tom Cawthorne, director of commercial agriculture with Hehmeyer Trading + Investments.
Higher pork belly prices might discourage bacon processors and slicers from storing product for spring and summer use, said analysts and traders.
Lower live cattle close
CME live cattle posted losses following softer wholesale beef values and expectations for steady-to-lower cash prices this week, said traders.
December live cattle finished down 0.4 cent/lb. at 115.175 cents. February ended 0.575 cent lower at 117.725 cents.
Last week packers paid $115-$118 per cwt for slaughter-ready, or cash, cattle in the U.S. Plains that brought $120 to $121 a week earlier.
The afternoon’s choice wholesale beef price was down six cents/cwt to $205.53 from Friday. Select cuts slipped 31 cents to $185.66, USDA said.
Packing plants closed for the year-end holidays will limit their need for supplies, a trader said. Beef demand is not expected to pick up until around mid-January, after some consumers pay off year-end holiday debt, he said.
CME feeder cattle futures closed flat to mixed. January benefited from its discount to the exchange’s feeder cattle index for Dec. 8 at 154.32 cents.
Live cattle market weakness pressured remaining feeder cattle contracts.
January feeder cattle closed up 0.225 cents/lb. at 145.45 cents. March ended unchanged at 143.325 cents. April finished down 0.2 cent to 143.45 cents.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.