Chicago | Reuters — Chicago Mercantile Exchange (CME) hog futures closed lower on Friday, retreating on a round of profit-taking after the benchmark December contract rose to its highest level in a month.
Soft cash hog values, weaker wholesale pork prices and a large weekly hog slaughter added to bearish sentiment.
“We’ve had a pretty good rally and (the market) was just due for a pullback,” said Doug Houghton, an analyst for Brock Associates.
CME December lean hog futures settled down 1.525 cents at 71.75 cents/lb., retreating after a climb to 73.625 cents, the contract’s highest level since Oct. 6 (all figures US$). Still, the contract ended the week up 1.8 per cent.
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The CME’s Lean Hog Index, a two-day weighted average of cash prices, fell to 76.84 cents per pound, its lowest reading since mid-May.
The U.S. Department of Agriculture (USDA) estimated this week’s U.S. hog slaughter, including Saturday’s projected kill, at 2.677 million head, up four per cent from the same period a year ago
In the wholesale pork market, the government priced pork carcasses on Friday afternoon at $87.28 per hundredweight (cwt), down 13 cents from the previous day.
CME cattle futures fell, with the bellwether December live cattle contract closing below Thursday’s low, reversing after posting a two-week high in early moves.
CME December live cattle futures settled down 0.8 cent at 183.875 cents/lb. and February ended down 1.2 cents, at 185.225.
CME feeder cattle futures faced additional pressure from a rally in CBOT corn futures that signaled higher costs for feed. January feeder cattle settled down 2.425 cents at 239.75 cents/lb.
Cash cattle trade had yet to develop by Friday afternoon, traders said. Feedlots in the southern Plains had been holding out for higher prices after fat cattle changed hands last week at around $185/cwt.
“Whatever happens in the cash market is going to set the tone for (futures on) Monday morning,” Houghton said.
Wholesale beef prices declined. USDA priced choice cuts of beef on Friday at $302.34/cwt, down $2.19 from Thursday, and select cuts fell $2.33 at $272.01/cwt.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago.
