Chicago | Reuters — Chicago Mercantile Exchange lean hogs rallied on Friday, with some contracts up the three-cents-per-pound price limit, fueled by bargain hunting following futures’ plunge to a six-year low in the previous session, traders said.
February closed 0.6 cent/lb. higher at 63.875 cents, while April and May ended three cents higher at 69.275 cents and 77.6 cents, respectively (all figures US$). CME lean hogs climbed despite daunting fundamental obstacles.
The average price for market-ready or cash hogs in Iowa/Minnesota had fallen $5.01 per hundredweight (cwt) from Monday to $60.93 on Friday, according to the U.S. Department of Agriculture.
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Separate USDA data showed the afternoon’s wholesale pork price at $72.94/cwt, down $5.54 from Monday.
Plentiful heavyweight hogs deluged the market at a time when packers are unable to move meat, partly due to West Coast gridlock, traders said.
Shippers suspended weekend cargo loading at U.S. West Coast ports, but will resume operations on Monday.
“This will not help pork nor grain prices,” said independent livestock trader Dan Norcini, referring to the temporary shutdown.
Live cattle up with cash prices
CME live cattle futures closed sharply higher, and some nearby months up the three-cent limit, in response to strong cash prices, traders and analysts said.
February closed up 2.65 cents/lb. at 156.075 cents. April and June finished three cents higher at 151.025 cents and 144.250 cents.
This week, cash cattle in Texas and Kansas sold at $161-$162/cwt, as much as $3 higher than last week, feedlot sources said.
Recent wintry weather in the U.S. Plains curbed animal weight gains and snarled transportation in hardest hit areas.
Packers spent more than expected for supplies while faced with slumping margins and sluggish wholesale beef demand.
The afternoon’s choice wholesale beef price dropped $3.53/cwt from Monday to $239.08. During that period, select cuts shed $1.79, to $233.81, the USDA said.
Regardless of their margins, packers have to make good on pre-booked meat orders, said JRS Consulting owner Jack Salzsieder.
CME live cattle gained further traction after April and June surpassed their respective 10-day moving averages of 150.11 cents and 143.04 cents, which triggered fund buying.
Buy stops, short-covering and live cattle market gains boosted CME feeder cattle futures.
March closed 3.8 cents/lb. higher at 199.45 cents, and April 3.3 cents higher at 199.15 cents.
— Theopolis Waters reports on livestock futures markets for Reuters from Chicago.
