Chicago | Reuters – Chicago Mercantile Exchange lean hog futures gained for a second day on Tuesday, supported by lower supplies of market ready hogs as the August futures contract nears expiration.
“Until we start seeing better numbers coming forward on packer runs, I think that’s going to elevate things a little bit,” said Matthew Wiegand, Risk Management Consultant at FuturesOne.
CME August lean hog futures added 1.575 cents to 109.075 cents per pound, reaching its highest since June 18, while benchmark October hogs gained 1.875 cents to 91.375 cents per pound, gaining 2.05 percent, its biggest gain since July 13.
Hog slaughter increased on Tuesday, with 475,000 head processed, though the U.S. Department of Agriculture revised Monday’s slaughter downward by 6,000 head.
Processors expect to see a seasonal increase in market-ready hogs going into October, though Wiegand said the trade is uncertain.
The cash hog market eased slightly, with the CME’s lean hog index, a two-day weighted average of cash prices, at $112.04 per hundredweight (cwt).
Meanwhile, cattle futures inched higher as boxed beef demand and tighter cattle supplies in the Northern U.S. Plains region support prices.
Benchmark CME October live cattle futures added 0.875 cent to 128.150 cents per pound. CME September feeder cattle futures added 0.550 cent to settle at 162.525 cents per pound.
Wholesale beef prices firmed, with Choice cuts gaining $4.84 to $285.84 per cwt, while select cuts added $4.11 to $267.49 per cwt, according to the U.S. Department of Agriculture.
Daily cattle slaughter firmed, with 122,000 head processed, a 2.5 percent increase from a week earlier, the USDA said.