Chicago | Reuters — Chicago Mercantile Exchange lean hog futures gained on Tuesday on short-covering and continued firmness in the wholesale pork market, traders said.
“August seems like its anchored by what’s going on in the cutout,” said Altin Kalo, economist at Steiner Consulting Group. “They’ve been surprised by the strength in the pork cutout.”
CME August lean hog futures gained 0.525 cent to 105 cents/lb., while October firmed 1.65 cents to 91.025 cents (all figures US$).
Slaughter is expected to increase as supplies of market-ready hogs increase moving into the fall, Kalo said. Daily hog slaughter increased to 474,000 head on Tuesday, up 2.16 per cent versus the week prior, USDA said.
Slim supply has kept the CME’s lean hog index, a two-day weighted average of cash prices, firm, climbing to $112.26/cwt, its highest since June 28.
“You’ve got the combination of lower hog kills and lower weights, that has reduced supply availability on the spot market,” said Kalo.
Meanwhile, CME live cattle futures followed wholesale beef prices lower, while feeder cattle were pressured by climbing corn prices.
CME’s most-active October live cattle futures fell 0.4 cent to 124.7 cents/lb., ending the session just above its 100-day moving average, while nearby August futures lost 0.475 cent to 119.775 cents.
“We’re seeing a decline in beef prices across the board, at the wholesale level, and so there’s nothing there to be excited about,” said Kalo.
Boxed beef prices were mostly lower, with choice cuts falling $1.43, to $265.06/cwt and choice cuts adding two cents to $249.51/cwt, USDA said.
CME August feeder cattle finished 1.85 cents lower at 155.525 cents/lb.
— Christopher Walljasper reports on agriculture and ag commodities for Reuters from Chicago.