Chicago | Reuters — Chicago Mercantile Exchange lean hog futures surged more than three per cent on Friday while live cattle gained about one per cent, lifted by chart-based and investment fund buying, traders and analysts said.
Hog futures had tumbled to a roughly 11-month low on Wednesday, before stabilizing on Thursday and then rising sharply to finish the week.
The most-active October hog futures contract settled up 1.95 cents at 60.975 cents/lb. (all figures US$).
“There’s a lot of technical buying,” Stewart-Peterson senior market advisory Naomi Blohm said.
Declines in prices for cash hogs and wholesale pork, coupled with abundant hog and meat supplies, had pressured hog futures for most of the week. But people were beginning to focus on the potential for tighter supplies later this year, she said.
“A lot of the bigger (hog) weights have been factored in… and people are done trading it,” Blohm added.
The U.S. Department of Agriculture after the closing of futures trading said wholesale pork prices were down $1.44 to $77.76 per cwt, lowest since May.
Cash hog prices in the top Iowa and southern Minnesota market were not reported by USDA due to “packer submission problems,” USDA said.
CME October live cattle settled up 0.825 cent at 107.75 cents/lb., hitting upside resistance at their 200-day moving average and failing to surpass Thursday’s roughly two-week high of 108.9 cents.
Investors still were awaiting trades in U.S. Plains cash cattle markets, following sales of about $105/cwt last week and online auction deals on Wednesday of $104.75. Beef packers late on Friday were bidding about $105 in Kansas and Texas, but feedlots were holding out for more, a trader said.
CME October feeder cattle were 1.425 cents higher at 150.225 cents/lb., finishing just below their session and 1-1/2 month high of 150.5.
Choice-grade wholesale beef prices were up 42 cents at $191.42/cwt and select cuts were down 87 cents at $185.85, USDA said.
— Michael Hirtzer reports on commodity markets for Reuters from Chicago.