U.S. livestock: Pork price rebound rallies CME hogs

Chicago | Reuters — Chicago Mercantile Exchange hog futures on Wednesday settled higher after a choppy day of trading, supported by unexpectedly strong demand for pork at wholesale, traders said.

Wednesday morning’s wholesale pork price turned $2.38 per hundredweight (cwt) higher at $124.11, after falling $2.68 the day before, according to U.S. Department of Agriculture data (all figures US$).

Grocers may be buying pork to feature after the Easter holiday, traders and analysts said. And, production cutbacks at packing plants reduced the flow of fresh pork into the retail sector, which lifted wholesale values, they said.

Some packers curbed slaughter rates to offset supplies lost to the porcine epidemic diarrhea virus.

A few packing plants will be dark on Easter Monday. That will limit their need for hogs, which pressured cash prices and initially weighed on the May hog contract.

USDA data showed the morning’s average price of hogs in western Midwest market down $3.22/cwt from Tuesday to $114.12.

CME hog futures made further headway, supported by their discounts to the exchange’s hog index at 124.12 cents.

Fund buying developed after nearby trading months broke through key moving average technical levels.

May hogs settled up 1.375 cent per pound to 122.875, above the 20-day moving average of 122.223 cents.

Most actively traded June ended at 123.775 cents, 1.25 cents higher. It surpassed the 10-day and 40-day moving average convergence level of 121.791 cents.

Live cattle futures rise

CME live cattle moved up in quiet trading, helped by their discounts to last week’s prices for slaughter-ready or cash cattle, traders said.

Technical related buying developed after June and August punched their 10-day moving averages of 135.608 cents and 133.345 cents, respectively.

Investors played it close to the vest while waiting for cattle in the cash market to change hands this week.

Last week, cash cattle in Texas and Kansas moved at $147/cwt, and at mostly $150 in Nebraska, feedlot sources said.

Improved wholesale beef prices and packers buying supplies for the first full week of post-Easter holiday slaughters may underpin cash cattle prices, traders said.

Poor packer margins and a season supply increase work against cash cattle values, they said.

Wednesday morning’s wholesale choice beef price gained 30 cents/cwt from Tuesday to $223.16. Select cuts rose 82 cents to $213.96, based on USDA data.

Beef packer margins for Wednesday were an estimated negative $116.75 per head, compared with a negative $121.80 on Tuesday and a negative $111.20 a week ago, as calculated by Colorado-based analytics firm HedgersEdge.com.

April live cattle closed up 0.475 cent/lb. to 145.75 cents. June ended up 0.2 cent to 135.625 cents, and above the 10-day moving average of 135.6 cents.

CME feeder cattle traded nearly par with the exchange’s feeder cattle index at 179.63 cents. Other feeder cattle contracts drew support from the firm live cattle market and lower corn prices.

April, which will expire on April 17, closed up 0.025 cent/lb. to 179.25 cents.

May finished up 0.125 cent, to 179.9 cents, and August 0.4 cent higher at 182.975 cents.

— Theopolis Waters reports on livestock futures markets for Reuters from Chicago.

 

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