Chicago | Reuters — Benchmark June lean hog futures on the Chicago Mercantile Exchange rose on Monday, setting a life-of-contract high on firm cash hog prices and expectations of tightening supplies.
CME June hogs settled up 0.2 cent at 126.05 cents/lb., paring gains after reaching a contract top of 126.875 cents (all figures US$). The nearby April and May contracts also closed higher, but deferred contracts ended lower.
The CME’s lean hog index, a two-day weighted average of cash hog prices, rose to 102.25 cents/lb., its highest since Aug. 31. But wholesale pork values fell. The U.S. Department of Agriculture (USDA) quoted the U.S. pork cutout at $107.41 per hundredweight (cwt) on Monday afternoon, down $2.49 from Friday, led by declining ham prices.
Read Also
Alberta crop conditions improve: report
Varied precipitation and warm temperatures were generally beneficial for crop development across Alberta during the week ended July 8, according to the latest provincial crop report released July 11.
Ahead o USDA’s quarterly Hogs and Pigs report on Wednesday, analysts surveyed by Reuters on average expected the government to show that the U.S. hog herd was 1.2 per cent smaller as of March 1 compared to a year earlier.
Meanwhile, Chinese pork processing giant WH Group said its 2021 profits rose 7.2 per cent to $1.043 billion on higher sales in the United States and Europe. Revenue at the group, which owns U.S.-based Smithfield Foods, the world’s largest pork processor, grew 6.7 per cent to $27.29 billion.
In cattle futures, CME June live cattle settled down 0.6 cent at 136.775 cents/lb. after USDA on Friday reported the number of cattle on feed as of March 1 at 12.163 million head, 101.4 per cent of the year-ago total and the highest March 1 inventory in records dating to 1996. Analysts had expected the report to show the figure at 101.1 per cent of a year ago.
Placements during February were 109 per cent of February 2021, topping market forecasts for 106.1 per cent, and marketings were 105 per cent of the year-ago total, also above trade forecasts for 104.2 per cent of the year-ago total.
CME May feeder cattle futures fell 0.25 cent to end at 165.075 cents/lb.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago.
