U.S. livestock: Firm cash markets lift hog futures

Cattle futures extend slide

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

Chicago | Reuters — Chicago Mercantile Exchange lean hog futures closed higher on Friday as firm U.S. cash markets and rising pork prices underscored tight hog supplies, analysts said.

News of the first confirmed cases of African swine fever in farmed pigs in Germany added support, raising uncertainty about pork export flows. However, exports of German pork are already subject to bans from many importers since the disease was confirmed in wild animals last September.

CME August lean hog futures settled up 1.35 cents Friday at 105.65 cents/lb. and October ended up 1.35 cents at 90.75 cents (all figures US$).

The CME’s lean hog index, a two-day weighted average of cash prices, climbed to $111.34/cwt, its highest since June 30.

“Cash hog prices have been going up, even though slaughter levels have been low. It just seems like there are some tight supplies out there right now,” said Doug Houghton, analyst at Brock Capital Management.

Wholesale pork prices firmed. USDA quoted the wholesale pork carcass cutout up 42 cents at $119.94/cwt on Friday afternoon, the highest since June 21.

On the cattle side, CME live cattle futures fell for a third straight session on lacklustre cash cattle trades this week and long liquidation ahead of the weekend in the absence of supportive news.

CME August live cattle futures ended down 0.95 cent at 120.175 cents/lb., with October down 0.925 cent at 125.6 cents. CME August feeder cattle finished down 1.75 cents at 155.625 cents/lb.

Wholesale beef prices have been sliding since early June. Choice cuts fell another $1.93 on Friday at $267.94/cwt, and select cuts fell by 69 cents, to $251.79/cwt, according to the U.S. Department of Agriculture.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago.

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