Chicago | Reuters — Chicago Mercantile Exchange lean hog futures sank more two per cent on Friday following lower cash and wholesale pork values, said traders.
They said worries about a looming supply buildup furthered hog futures losses.
April hogs ended 1.525 cents/lb. lower at 66.75 cents, and May down 1.35 cents to 72.75 cents (all figures US$).
Friday morning’s western Corn Belt cash hog prices averaged $68.32/cwt in light volume, a $2.24 plunge from Thursday, the U.S. Department of Agriculture said.
Separate USDA data on Friday showed the average wholesale pork price, or cutout, fell 72 cents/cwt to $79.44 from Thursday, following $7.54 lower pork bellies.
The most recent U.S. government quarterly hog report showed large numbers of pigs coming to market this spring and summer, said independent CME livestock futures trader Dan Norcini.
Volatile pork belly prices are responsible for the wild swings in pork cutout values lately, he said.
Processors have enough hogs to maintain current slaughter levels while helping packers preserve their profitable margins, a hog merchant said.
Most live cattle months rise
CME live cattle futures settled mostly firm on pre-weekend positioning that included fund rolling ahead of similar moves next week, said traders.
Funds in CME’s live cattle and hog markets that track the Standard + Poor’s Goldman Sachs Commodity Index sold or “rolled” their April long positions mainly into June.
The first of five days for the roll process officially begins on Tuesday.
April live cattle closed down 0.175 cent/lb. to 115.975 cents. June ended up 0.025 cent to 106.75 cents and August 0.325 cent higher at 102.275 cents.
Investors await next week’s sales of slaughter-ready, or cash, cattle that this week traded at $123-$126/cwt, versus $124-$125 a week ago.
Some packer inventories were full, but others paid more for supplies given their improved margins and strong wholesale beef demand.
However, there are sentiments that the recent beef cutout price surge may about to peak at a time when Lent tends to hurt meat demand.
Friday morning’s choice wholesale beef price rose 64 cents/cwt, to $208.99, from Thursday. Select cuts were down 39 cents, to $203.33, USDA said.
Short covering and back-month live cattle futures buying boosted CME feeder cattle.
March feeders closed 0.775 cent/lb. higher at 124.225 cents.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.