Chicago | Reuters — U.S. lean hog futures jumped as much as two per cent on Wednesday, lifted by stabilizing cash prices and ideas the market may have bottomed out after hitting six-year lows earlier this month.
Live cattle futures and feeder cattle also were higher in light-volume trading at the Chicago Mercantile Exchange ahead of Thursday’s U.S. Thanksgiving Day holiday.
Hogs for December delivery jumped to a nearly three-week high, gaining 1.575 cents, to 58.8 cents/lb. (all figures US$). That’s the highest level since Nov. 3, and well above their low of 51.8 reached on Nov. 16, which was the lowest point on a continuous chart since October of 2009.
Cash hogs traded one cent lower to $51.83/cwt in the benchmark Iowa and southern Minnesota market, the U.S. Department of Agriculture said, continuing their recent sideways trend.
Hog slaughter rates typically begin declining at this time of year, and pork packers who have been making as much as $40 per head could have to start paying a little bit more for the animals, traders said.
“The market is looking ahead and noting that there are one or two weeks of larger weekly (hog) kills, before things slow down into January and February,” Allendale Inc. analyst Rich Nelson said.
Still, ample supplies of hogs and cattle, as well as pork and beef, were likely to cap gains in prices, at least in the short-term, the traders said.
USDA said the wholesale pork prices fell $1.90, to $71.72/cwt, lowest since April.
The wholesale beef choice cutout was up 28 cents, to $204.09/cwt, rebounding after hitting the lowest point since January of 2014.
Signs that the lower beef prices prompted retail buying helped lift live cattle futures.
December live cattle were up 0.7 cents, to 130.95 cents/lb., while January feeder cattle were up 0.3 cent, to 164.975 cents/lb.
— Michael Hirtzer reports on agriculture and ag commodity markets for Reuters from Chicago.