Chicago | Reuters — U.S. live hog futures gained on Thursday on short-covering as contracts strengthened against cash markets, traders said.
CME live cattle futures firmed, while feeder cattle dipped ahead of Friday’s U.S. Department of Agriculture cattle on feed report.
The nearby CME June lean hogs gained 2.475 cents, to 59.35 cents/lb., while the July contract lifted 1.375 cents to 57.175 cents/lb. (all figures US$).
The June live cattle futures contract added 0.4 cent at 98.8 cents/lb., while August live cattle ended 0.6 cent higher at 98.225 cents/lb.
Feeder cattle contracts were weaker, with the August contract slipping 0.125 cent to 128.875 cents/lb.
USDA said on Thursday that the daily hog slaughter was 398,000, up slightly from Wednesday and the highest total since April 17. The daily cattle slaughter totaled 103,000, the highest since April 7.
“With the slaughter increases coming, demand for hogs is going to increase,” said Doug Houghton, technical analyst at Brock Capital Management. “It says to me the front-end contracts were probably a bit too far discount to cash, and there’s probably some profit taking on short positions.”
Slaughter numbers remain below pre-COVID-19 pandemic averages, as coronavirus outbreaks at slaughter facilities have led to plant closures, backing up hogs and cattle at the farm level.
USDA showed a slight drop in cold storage meat supplies on Thursday, with beef dropping two per cent from April, but still 14 per cent higher than last year. Frozen pork was down just one per cent from last year.
Pork shipments to China totaled 19,800 tonnes last week, with 12,600 tonnes of pork canceled and 400 tonnes of beef shipped, according to the USDA.
— Reporting for Reuters by Christopher Walljasper in Chicago.