Chicago | Reuters — Most Chicago Mercantile Exchange hog contracts ended lower on Thursday after profit-taking and uneasiness over U.S. trade with Mexico pared some of Wednesday’s gains, said traders.
On Tuesday Mexico’s economy minister said that country will import more pork from Europe after placing a 20 per cent duty on U.S. pork in response to Washington’s higher tariffs on Mexican steel and aluminum.
“Trade issues are hanging over the market. Without that influence we’d have the July contract at 85 cents/lb.,” said Allendale Inc. chief strategist Rich Nelson.
June hogs, which will expire on June 14, closed up 0.425 cent/lb. at 78.575 cents. Most actively-traded July ended 0.5 cent lower at 79.45 cents. August finished 1.2 cents lower at 76.425 cents.
Thinly-traded June hog futures benefited from higher prices for wholesale pork and slaughter ready, or cash, hogs, said traders and analysts.
Packers are entering a seasonal decline in hog numbers as grocers purchase pork for spring grilling and June 17 Father’s Day meat advertisements, they said.
Mostly weak live cattle futures
CME live cattle closed generally weak, pressured by profit-taking and forecasts for increased supplies ahead, said traders.
They said firmer cash price expectations for this week underpinned the June contract.
“Most people are still holding the idea that this is a small bump higher in (cash) prices in the face of what will be a surge in numbers,” said Nelson.
June live cattle closed up 0.075 cent/lb. at 108.375 cents. August ended 0.425 cent lower at 104.15 cents. October finished down 0.025 cent at 107.15 cents.
Market bulls were encouraged by packers that raised bids for market-ready, or cash, cattle in the U.S. Plains on Thursday to $110/cwt from $107 earlier this week. Feedlots priced cattle at $115.
The bulk of cash cattle in the Plains last week fetched $110/cwt.
Cash cattle prices may have bottomed out after declines in recent weeks, a trader said. Retailers and restaurants may slow beef purchases after they fill inventories for Father’s Day, he added.
Profit-taking and weaker deferred live cattle futures pressured CME feeder cattle contracts.
August closed down 0.425 cent/lb. at 146.325 cents.
–– Reporting for Reuters by Theopolis Waters in Chicago.