Chicago | Reuters – Chicago Mercantile Exchange lean hog futures settled higher on Friday in a recovery from sharp losses recorded in the previous session, while live cattle futures weakened for a second consecutive day.
December lean hog futures LHZ2 ended up 0.975 cent at 86.100 cents per lb. The contract bounced after sinking by 3.375 cents on Thursday and touching its lowest price since Oct. 18.
“The only thing that supported the December contract today was the sharp discount to the cash index that resulted from the near limit-down close yesterday,” said Dan Norcini, an independent livestock trader.
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Cattle futures on the Chicago Mercantile Exchange were mixed on Thursday, with fresh contract highs in the feeder cattle market while live cattle ran into resistance at their own highs to settle with small losses.
A sharp increase in pork belly prices in a midday cutout report from the U.S. Department of Agriculture helped support stronger futures, Norcini said.
The USDA quoted the U.S. pork carcass cutout value at $101.34 per cwt, up by $2.88 from Thursday, while bellies climbed by $19.72 to $155.22.
The surge in pork belly prices may not last due to ample supplies, though. The USDA reported on Monday that belly inventories in cold-storage facilities as of Sept. 30 were up 3% from the previous month and 183% from a year earlier.
CME December live cattle LCZ2, meanwhile, ended 0.425 cent lower at 153.00 cents per lb. The contract was consolidating after surging over the past month, brokers said.
CME November feeder cattle FCX2 ended 0.250 cent lower at 177.875 cents per lb, and January feeders FCF3 slipped 0.075 cent to 180.375 cents per lb.
Meatpackers slaughtered an estimated 124,000 cattle on Friday, up from 122,000 cattle a week ago and 120,000 cattle a year ago, the USDA said.
– Additional reporting by Julie Ingwersen.
