Chicago | Reuters — Lean hog futures on the Chicago Mercantile Exchange fell on Monday on profit taking following last week’s Hogs and Pigs report from the U.S. Department of Agriculture.
“The overall fundamental is still tight numbers, tight supply created by disease, empty pen spaces, empty buildings,” said Brad Kooima, commodity broker at Kooima Kooima Varilek Trading Inc. “At some point, the market flat runs out of buyers. Everyone that was bullish already was already participating.”
CME benchmark June lean hogs settled lower for a fifth consecutive session, down 4.3 cents at 116.15 cents/lb. (all figures US$). The 3.57 per cent drop was its biggest daily decline since March 4, finding technical support at the 50-day moving average.
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Daily hog slaughter of 477,000 head was in line with week-ago volumes and 41.96 per cent higher than the same period a year earlier.
The CME’s Lean Hog Index, a two-day weighted average of cash hog prices, fell 0.5 cents, to 102.63 cents/lb.
CME live cattle futures fell for a fourth consecutive session, pressured by strong slaughter as producers in drought-stricken parts of the U.S. plains thin herds.
“The beef cattle slaughter has just been relentless,” said Kooima. “Steady cash helped take us off the lows.”
Packers slaughtered 121,000 head of cattle on Monday, 2,000 more than a week ago and up 15.24 per cent from a year earlier.
Strong beef demand has helped ease supply pressure, as firm cash cattle trade pulled futures up from earlier-session lows to end the day just below even.
Cash cattle trades mostly steady at $138/cwt, though some $140 trades took place in the northern plains, traders said.
Boxed beef prices were mixed, with choice cuts climbing 90 cents, to $268.04/cwt, while select cuts eased 82 cents, to $261.70.
The most-active June contract fell 0.925 cent, to 134.925 cents/lb. May feeder cattle fell 3.65 cents, to 162.475 cents/lb., as rising corn prices push feed costs up for producers.
— Christopher Walljasper reports on agriculture and ag commodities for Reuters from Chicago.
