Chicago | Reuters — Chicago Mercantile Exchange lean hog futures rallied more than three per cent on Monday in a short-covering and bargain-buying rebound from life-of-contract lows posted last week, traders said.
Some contracts, including actively-traded June, rose by as much as the daily three-cent limit as a steady slide in prices over the past month has left futures technically oversold.
“The hogs got awfully cheap. You can only beat this market up so long. If you’re looking to secure hogs or pork products, this is where you look to buy,” said Jeff French, broker with Top Third Ag Marketing.
April hogs settled up 0.775 cent/lb. at 52.9 cents, with gains in the spot contract limited by low cash market prices. May futures ended 2.85 cents higher at 67.325 cents and June finished 2.6 cents higher at 75.875 cents (all figures US$).
Cash hogs in the closely followed Iowa and southern Minnesota market were up 61 cents/cwt on Monday, but down 74 cents from a week ago and nearly $14 from a month ago, according to U.S. Department of Agriculture data.
Futures advanced despite concerns about rising trade tensions between the U.S. and China, a major pork importer.
CME live cattle futures were mostly lower on Monday, weighed down by large supplies and weak cash market prices after cattle traded $3-$4/cwt lower last week.
Investors will be closely tracking this week’s cash cattle and beef prices for signs of a recovery as grocers feature meat for grilling, although weather in parts of the country remains wintry.
Traders are digesting news that Brazil’s Marfrig Global Foods is buying U.S.-based National Beef Packing. Past sales of U.S. cattle and beef companies to foreign buyers have been linked to initial sell-offs in futures markets, traders said.
CME April live cattle closed down 0.2 cent/lb. at 112.025 cents and June ended up 0.175 cent at 102.5 cents.
April feeder cattle closed 0.875 cent/lb. lower at 134.45 cents an May fell 0.1, to 135.525 cents.
— Karl Plume reports on agriculture and agribusiness for Reuters from Chicago.