Chicago | Reuters –– Chicago Mercantile Exchange lean hogs slumped for a third consecutive session on Friday as hefty supplies continued to drag down prices for market-ready (cash) hogs, traders said.
Spot-August futures finished 0.75 cent/lb. lower at 77.325 cents, and most-active October down 0.325 cent at 64.125 cents.
Friday morning’s average hog price in the western Midwest sank $5.70/cwt from Thursday in low volume to $68.61, the U.S. Department of Agriculture said.
Processors sorting through ample supplies at lower prices offer farmers less incentive to hold hogs back, resulting in lighter animal weights, traders and analysts said.
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Based on recent government hog weight data, producers are current in sending hogs to market, which suggests that “we don’t have an abundance of hogs in the pipeline right now,” said AgriVisor senior market analyst Dale Durchholz.
The pork cutout has fluctuated as grocers buy product hand-to-mouth to feature for Labour Day holiday grilling demand, a trader said.
The morning’s wholesale pork price (cutout) was at $90.41/cwt, $1.41 higher than on Thursday, USDA said.
CME August lean hogs led losers after traders sold that contract before its Aug. 14 expiration date and bought deferred months.
Cattle ease ahead of cash prices
CME live cattle slipped on profit-taking while awaiting this week’s cash cattle sales, traders said.
Spot-August futures closed down 0.15 cent/lb. at 149.575 cents, and October 0.325 cent lower at 148.525 cents.
Cash bids in the U.S. Plains stood at $145 to $147/cwt against sellers who priced cattle up to $155, feedlot sources said. Last week, cash cattle moved at $147 to $149.
Slim but profitable packer profit margins and roughly 12,000 fewer cattle for sale than a week ago are bullish cash price influences.
“This week is a weird cash game,” said Durchholz, referring to tight packer inventory and feedlots “on the cusp” of a seasonal decline in available cattle.
Furthermore, the stable domestic economy might encourage grocers to feature beef despite its high price relative to pork and chicken, he said.
Friday morning’s wholesale choice beef price was up 28 cents/cwt from Thursday to $235.47/cwt. Select cuts were 75 cents higher at $229.14, USDA said.
Soft corn prices and live cattle futures selling undercut CME feeder cattle.
August finished 0.85 cent/lb. lower at 214.125 cents.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.
