U.S. livestock: CME hog futures climb, live cattle fall before holiday

Chicago | Reuters — Chicago Mercantile Exchange hog futures on Thursday finished higher on fund buying and short-covering ahead of the Easter holiday, traders said.

CME will be closed on Friday in observance of the Good Friday holiday.

Some investors bought the May and June contracts in anticipation of a post-Easter uptrend in cash hog and pork demand.

Government data showed the afternoon’s average price of hogs in the Iowa/Minnesota market up 50 cents per hundredweight (cwt) from Wednesday to $115.69 (all figures US$).

Thursday morning, hogs in the Midwest moved $1-$2/cwt lower, according to hog dealers.

Prices for market-ready, or cash, hogs recently felt pressure as some packing plants plan to be closed on Friday and Monday for the holiday.

Processors had already curbed slaughter rates to offset tight supplies as the porcine epidemic diarrhea virus reduced hogs available for slaughter.

Grocers are cautious about booking large amounts of meat until they determine how much product moved during the three-day holiday weekend.

Thursday afternoon’s wholesale pork price dropped $1.08/cwt from Wednesday to $120.08, the U.S. Department of Agriculture said.

Upward momentum in hog futures accelerated after nearby trading months broke through their 20-day moving resistance levels, touching off fund buying and buy stops.

May hogs finished up 0.625 cent/lb. to 123.5 and above the 20-day moving average of 122.121 cents.

Most actively traded June ended at 124.825 cents, 1.05 cents higher, surpassing the 20-day moving average of 124.556 cents.

Live cattle futures sag

CME live cattle ended lower on profit-taking in response to more cash price losses, traders said.

On Thursday, cash cattle in Kansas traded at $147/cwt, down $1 from last week, feedlot sources said. Sales of similar cattle in Nebraska brought $148, $2 lower than a week ago, they said.

Cash cattle on Wednesday in Texas moved at $147/cwt, $1 lower compared with a last week.

Fallen cash cattle prices and the recent upswing in wholesale beef costs should help improve packer margins, traders and analysts said.

Thursday afternoon’s wholesale choice beef price jumped $2.13/cwt from Wednesday to $225.88. Select cuts rose 96 cents to $215.43, based on USDA data.

Beef packer margins for Thursday were an estimated negative $108.35 per head, compared with a negative $116.75 on Wednesday and a negative $120.15 a week ago, as calculated by Colorado-based analytics firm HedgersEdge.com.

April live cattle closed down 1.55 cents/lb. to 144.2 cents, and June ended 1.25 cents lower at 134.375 cents.

CME feeder cattle, which expired at noon CT, settled down 0.7 cent at 178.55 cents. It was nearly in line with the exchange’s feeder cattle index of 178.95 cents.

Remaining feeder cattle contracts felt pressure from selling in CME’s live cattle market and fund liquidation.

May feeder cattle finished 1.85 cents lower at 178.05 cents, and August 1.575 cents lower at 181.4 cents.

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

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