Chicago | Reuters — Chicago Mercantile Exchange lean hog futures gained for a third straight day on Wednesday, led by upward-trending cash and wholesale pork prices, said traders.
December hogs closed up 1.325 cents/lb. at 54.7 cents (all figures US$). Most actively traded February ended 2.275 cents/lb. higher at 59.75 cents.
Packers are content to pay more for hogs as long as their margins hold out and they are able to sell product, a Midwest hog merchant said.
Some processors, he added, are having difficulty buying hogs that are not as plentiful as they were a few weeks ago when plummeting cash prices forced farmers to sell animals earlier than they would have.
Also, supplies have tightened as colder temperatures in parts of the Midwest slow down animal weight gains, regional hog merchants said.
Doug Houghton, an analyst with Brock Associates, said Wednesday’s U.S. Department of Agriculture pork export data for October suggests strong exports may have underpinned pork prices during the fall.
Wednesday morning’s prices for slaughter-ready, or cash, hogs in Iowa/Minnesota averaged $48.65/cwt, $1.38 higher than on Tuesday, the USDA said.
Separate government data showed the wholesale pork price on Wednesday morning jumped $1.09/cwt from Tuesday to $75.60.
Lower live cattle settlement
Weaker cash and wholesale beef prices pressured CME live cattle futures, traders said.
December live cattle closed 0.475 cent/lb. lower at 109.375 cents, and February ended down 0.275 cent, to 110.775 cents.
Adequate supplies, slimmer packer margins and tepid wholesale beef demand undercut early-week cash cattle prices, said traders and analysts.
Wednesday morning’s choice wholesale beef price fell 98 cents/cwt from Tuesday to $189.53. Select cuts were 93 cents lower at $172.30, USDA said.
So far this week a small volume of cattle in the U.S. Plains moved at $112/cwt, down from mostly $114 to $115 last week, said feedlot sources.
Animals at Wednesday morning’s Fed Cattle Exchange traded lightly at $109 to $112/cwt. Cattle there a week ago fetched $111.50 to $113.25.
Packer bids for unsold cattle in the Plains stood at $110-$112/cwt versus asking prices as high as $116, feedlot sources said.
Technical support and firmer back-month live cattle futures underpinned CME feeder cattle contracts. January feeders ended up 0.125 cent/lb. at 126.975 cents.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.