U.S. livestock: Supplies drag CME hogs to eight-month low

(Regis Lefebure photo courtesy ARS/USDA)

Chicago | Reuters — Chicago Mercantile Exchange lean hog futures on Monday were weakened by falling prices for slaughter-ready, or cash, hogs along with softer wholesale pork values as supplies build seasonally, said traders.

They said packers also have more livestock at their disposal as packing plants prepare to shut down for the upcoming Labour Day holiday.

October ended 1.45 cents/lb. lower at 61.625 cents, and December finished down 1.375 cents, to 57.575 cents (all figures US$).

Investors sold CME lean hogs and simultaneously bought the exchange’s live cattle futures that rallied on short-covering following last Friday’s bullish U.S. Department of Agriculture monthly Cattle on Feed report.

CME live cattle drew more support from technical buying and the outlook for possibly steady cash prices this week — helped by improved meat purchases for Labour Day holiday grilling demand.

Last week packers paid $106-$107/cwt for cash cattle that a week earlier brought $109 to $110.

August live cattle, which will expire on Thursday, ended up 0.25 cent/lb. to 106.2 cents. Most actively traded October finished up 1.45 cents at 108.375 cents, and above the 200-day moving average of 107.756 cents.

Feeder cattle futures at the CME closed sharply higher, ignited by fund buying, live cattle futures gains and as much as $8/cwt higher cash feeder cattle prices.

August feeders, which will also expire Thursday, closed up 1.05 cents/lb. to 142.425 cents. Most actively traded September closed 2.95 cents higher at 145.875 cents.

— Theopolis Waters reports on livestock markets for Reuters from Chicago.

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