Chicago | Reuters — Benchmark July lean hog futures on the Chicago Mercantile Exchange jumped nearly five per cent on Wednesday, extending their two-day rally to 11 per cent on a round of bargain-buying following a months-long slump, traders said.
CME July hogs settled up 3.8 cents at 83.325 cents/lb., while front-month June hogs ended up 1.75 cents at 82.575 cents/lb. (all figures US$).
The hog market has been under pressure for most of 2023, anchored by excessive hog supplies and weak demand for pork from exporters and U.S. consumers.
Read Also
U.S. finalizes biofuel blending quotas for 2026-27, cuts RINS for foreign feedstocks
The Trump administration on Friday finalized new biofuel blending volumes mandates for the U.S. oil refiners, requiring more of the fuels made from corn and other agricultural products than initially proposed,in an apparent win for U.S. farmers.
July hogs had plunged to a life-of-contract low of 74.025 cents on Friday, while regulatory data showed that managed commodity funds held a near-record large net short position in lean hog futures as of May 23, leaving the market primed for a short-covering bounce.
“We’re probably seeing a lot of short-covering, especially around month-end,” said Austin Schroeder, a commodity analyst with Nebraska-based Brugler Marketing.
Firming wholesale pork prices lent support. The U.S. Department of Agriculture priced carcasses late Wednesday at $85.27 per hundredweight (cwt), up $1.59 from Tuesday and the highest since mid-March.
Cattle futures rose as well, setting life-of-contract highs as tightening U.S. cattle supplies and rising beef prices continued to buoy the market.
CME August live cattle settled up 0.5 cent on Wednesday at 167.675 cents/lb. after setting a contract high at 167.75. August feeder cattle rose 1.4 cents to settle at 239.175 cents/lb. after posting a contract high at 239.85 cents.
In the beef market, USDA priced choice cuts at $305.84/cwt, up 88 cents from Tuesday, while prices for select cuts fell 62 cents at $287.15/cwt.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago.
