U.S. livestock: CME lean hogs end mixed after five-session rally

Feeder cattle up on corn supply projection

CME April 2021 lean hogs with Bollinger (20,2) bands. (Barchart)

Chicago | Reuters — U.S. lean hog futures ended mixed on Tuesday following five straight sessions of contract highs that triggered technical and speculative selling and profit taking in some futures months.

The market, however, remained underpinned by strong cash hog prices, robust export demand and profitable pork packer margins, as well as Tuesday’s downturn in feed corn costs, analysts said.

Chicago Mercantile Exchange (CME) February hogs rose 0.425 cent to close at 72.6 cents/lb., supported by a rising lean hog index ahead of the contract’s expiration next week (all figures US$). April hogs, the most active contract, ended 0.275 cent lower at 80.375 cents/lb. following five straight sessions of posting life-of-contract highs.

The cash pork carcass cutout value rose to $85.36/cwt on Tuesday, up 49 cents from the prior day, U.S. Department of Agriculture data showed.

The average pork packer margin jumped to $36.85 per head, up $2 from Monday, according to livestock marketing advisory service HedgersEdge.com.

Live cattle futures also ended mixed amid technical selling and profit-taking after recent gains, with strong demand and concerns about harsh cold in the U.S. Plains cattle region limiting declines.

Forecasts for bitter cold across the central U.S. was likely to slow cattle weight gains, impeding feed efficiency and delaying movement of supplies to market.

Feeder cattle futures, however, rose after USDA projected U.S. corn supplies above market expectations in a monthly supply-and-demand report.

Spot CME February live cattle rose 0.825 cent to 117.45 cents/lb., while actively traded April futures fell 0.125 cent to 123.825 cents/lb.

March feeder cattle gained 1.2 cents to close at 138.65 cents/lb.

— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago.

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