Chicago | Reuters –– U.S. lean hogs surged as much as 2.5 per cent for their biggest daily gains since December on Wednesday, lifted by rising cash prices and wholesale pork values that were tied to expectations of more export business to China, traders said.
Technical buying also buoyed hog prices on the Chicago Mercantile Exchange, with some contracts including August hogs surpassing lifetime peaks reached in mid-March.
Most-active June lean hogs settled up 2.025 cents at 82.825 cents/lb., still below their contract high of 83.975 (all figures US$).
The traders were waiting for U.S. Department of Agriculture weekly export sales data due early on Thursday to see if China bought any U.S. pork last week.
“We’ve had phenomenal demand from foreign and domestic markets,” Top Third Ag Marketing analyst Craig VanDyke said of pork. “The cash markets have been on a steady grind higher, and we’re kind of bouncing off that.”
USDA showed average hog prices in the key Iowa and southern Minnesota market at 74.24 cents/lb., the highest since August.
Live cattle and feeder cattle futures each lost ground, with both contracts reversing from early gains to turn lower late in the session.
“Someone came and sold it really hard into the close,” said Domenic Varricchio, a broker at Schwieterman Inc. “Whether they had to dump some of their longs from last week, someone wanted to force (prices) down, and they waited until the last minute.”
The losses in cattle came despite expectations of good demand for slaughter-weight animals from beef packers, and recent gains in wholesale beef prices.
CME June live cattle settled 0.45 cent lower at 122.825 cents/lb., below the one-month high of 124.025 hit earlier in the day. CME August feeder cattle eased 1.05 cents to 149.275, reversing from a high of 152.2.
— Michael Hirtzer reports on ag commodity markets for Reuters from Chicago.