Chicago | Reuters — Chicago Mercantile Exchange lean hog futures hit their highest level in more than a month on Friday following gains in cash prices.
Recent advances in futures have built some upward momentum into the market, brokers said, though the sector continues to grapple with an excess of hogs and lacklustre demand for pork.
CME July lean hog futures ended 2.425 cents stronger at 89.625 cents/lb. (all figures US$). The contract reached its highest price since May 3 at 90.2 cents.
Wholesale pork prices also jumped, with the carcass cutout up $2.71, to $88.39/cwt, the U.S. Department of Agriculture said in a daily report.
Read Also
Feed Grain Weekly: Prices in a slow decline
Seasonal weakness and recent rains across the Prairies pressured feed grain prices according to a Moose Jaw-based trader.
USDA, in a separate monthly report, raised its hog price forecast for the second quarter. The department also increased its 2023 cattle price forecast from May due to firm demand.
Live cattle futures ended mixed after setting a new record high this week for a front-month contract on a continuous chart. Rising wholesale prices for beef and tight cattle supplies in the U.S. continue to underpin the market, analysts said.
Live cattle futures remain at a big discount to the cash market, where prices this week climbed to $190-$191/cwt in Iowa and Nebraska, from about $186/cwt last week.
CME August live cattle futures settled down 0.4 cent at 171.85 cents/lb. August feeder cattle finished 0.35 cent higher at 239 cents/lb. at CME.
“I’m hearing the cash will be higher next week,” said Dennis Smith, commodity broker for Archer Financial Services.
Beef processors were making bigger profits despite soaring cattle prices. Their estimated margins rose to $130.85 per head of cattle from $107 per head on Thursday and $53.35 a week ago, livestock marketing advisory service HedgersEdge.com said.
USDA priced choice cuts of beef at $332.93/cwt in the wholesale market, up $4.20 from Thursday. Prices for select cuts increased $1.61, to $305.71/cwt.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.
