Chicago | Reuters –– U.S. lean hog futures rallied 3.7 per cent on Monday to their highest level since January, with strength in the cash market leading the way, traders said.
But cattle futures weakened, setting back from Friday’s gains amid plentiful supplies.
Chicago Mercantile Exchange April lean hogs settled 2.3 cents higher at 62.85 cents/lb. (all figures US$). April hogs peaked at 63.5 cents, their highest since Jan. 24.
June hogs closed up 1.775 cents at 79.95 cents.
“There is obviously a lot of technical buying,” said Doug Houghton, analyst with Brock Associates Inc. “There is anticipation of seasonal strength in cash prices.”
The closely watched cash pork carcass cutout price was up $1.38 on Monday at $66.42/cwt.
Concerns about African swine fever in China boosting the country’s demand for imports of U.S. supplies also lent support to hog futures.
Chinese hog prices marched to their highest in 14 months on Monday and look set to keep rising after weeks of gains, analysts and producers said, as the worst disease outbreak to hit the country’s vast pig herd in years chops supply.
About one million pigs have been culled in China as the country tries to contain the disease that has spread to 111 confirmed cases in 28 provinces and regions.
Chicago Mercantile Exchange April live cattle ended 0.675 cent lower at 129 cents/lb.
Feeder cattle also dropped, with April easing 1.725 cents, to 145.975 cents/lb.
Wholesale beef prices firmed for an eighth straight day on Monday. USDA quoted the choice cutout at $227.36/cwt, up $1.23 from Friday, and select cuts at $219.63, up 85 cents.
USDA on Friday afternoon said on-feed supplies of cattle on Feb. 1 were at 100.4 per cent of a year ago, compared with the average trade estimate for 100.2 per cent.
Cattle placements in January were at 94.7 per cent of a year ago and marketings were at 102.8 per cent.
— Mark Weinraub is a Reuters commodities correspondent in Chicago.