Chicago | Reuters –– Chicago Mercantile Exchange lean hog futures soared three per cent on Wednesday, rebounding on technical buying from the steep losses seen in the previous session, traders and analysts said.
Cattle futures also were mostly higher, even as some contracts edged slightly lower after hitting one-month peaks. Higher prices for wholesale beef and pork because of retailer buying for the holiday season have contributed to gains in livestock futures in recent days.
“We had a healthy pullback yesterday, but we’re in an uptrend. The fact that we were able to hold technical levels is a good sign,” Top Third Ag Marketing analyst Craig VanDyke said of hog futures.
CME December lean hogs settled 1.375 cents higher at 47.825 cents/lb., recovering nearly all of Tuesday’s losses.
Hogs on Tuesday failed to surpass Monday’s one-month high, before reversing lower. The contract continued to hit upside resistance at its 50-day moving average.
The U.S. Department of Agriculture forecast record-large hog and pork production this year, and abundant supplies were likely to cap gains in prices. But there were signs low prices were beginning to entice more buying.
Wholesale pork prices reached the highest levels in about a month on Tuesday, led by sharply higher prices for hams. Wholesale pork eased by $1.87, to $72.58/cwt, USDA said after the close of futures trading on Wednesday.
Pork packers were enjoying big profit margins, further supporting hog futures after they hit a 14-year low on Oct. 19, the traders said.
CME December live cattle finished 0.15 cent lower at 105.375 cents/lb., edging down from their earlier high of 106.
CME November feeder cattle settled 0.4 cent higher at 126.575 cents/lb., highest since Sept. 28.
Cattle prices were consolidating as investors awaited deals in U.S. Plains cash cattle markets. Packers were testing the waters with cattle bids of about $102/cwt, far from offerings from feedlots of $108 and up. Last week in the Plains, cattle traded at mostly $104-$105, feedlot sources said.
— Michael Hirtzer reports on ag commodity markets for Reuters from Chicago.