Chicago | Reuters — U.S. lean hog futures rose on Thursday as firmer cash markets for hogs and some pork products supported thinking that the market may have bottomed out after declining for much of 2020, traders said.
Chicago Mercantile Exchange (CME) August lean hog futures settled up 2.275 cents at 50.225 cents/lb., crawling back after dipping to a life-of-contract low of 47.525 cents on June 29 (all figures US$).
Ample U.S. hog supplies have depressed hog and pork prices in recent months. But hog futures jumped on Thursday after the U.S. Department of Agriculture showed cash cutout prices for hams surging late on Wednesday to $54.22/cwt, from $38.19 a day earlier.
“Lean hog futures are notably higher following an impressive increase in pork product prices Wednesday afternoon, suggesting that cheap prices are buying demand,” StoneX chief commodities economist Arlan Suderman wrote in a client note.
Also, cash hog prices in the closely watched Iowa and southern Minnesota market rose by $1.72, according to USDA, a move some saw as a bullish signal.
“People are probing for a bottom in this hog market,” said Dan Norcini, an independent livestock trader.
CME live cattle futures closed modestly higher on expectations for steady to firmer cash cattle prices this week, but uncertainty about beef demand hung over the market, capping rallies.
Prices for choice cuts of boxed beef on Thursday afternoon declined 24 cents, to $203.59/cwt, and select cuts fell 69 cents, to $194.83/cwt, according to USDA.
“Beef demand in the middle of the summer is generally not good,” Norcini said.
CME August live cattle settled up 0.1 cent at 99.25 cents/lb. August feeder cattle rose 0.475 cent, to 134.525 cents/lb.
Traders await USDA’s monthly agricultural supply/demand reports on Friday.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago.