Chicago | Reuters — Chicago Mercantile Exchange hog futures rallied on Friday to their highest in nearly seven years, with strong demand outstripping supplies on hand as restaurants around the U.S. have been reopening after COVID-19 shutdowns, traders said.
“We are seeing strong retail demand, with the food service trying to recapture their share of the market,” said Matthew Wiegand, a risk management consultant and commodity broker at FuturesOne in Nebraska. “But the supply has not fully rebounded as much as they would like it.”
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CME July lean hog futures settled up three cents at 116.55 cents/lb. (all figures US$). The front-month contract hit its highest on a continuous basis since August 2014.
The pork cutout value ended Friday at $120.86 per hundredweight (cwt) dropped $1.39 from the 6-1/2-year high of $122.25 hit earlier in the day, according to the U.S. Department of Agriculture.
CME August live cattle futures rose 1.05 cents, to 120.925 cents/lb.; August feeder cattle gained 2.625 cents, to 153.7 cents/lb.
Prices for both choice and select cuts of boxed beef hit fresh one-year highs on Thursday evening, USDA said.
After the close, USDA said the amount of cattle on feed as of May 1 stood at 105 per cent of a year earlier, topping forecasts for 103.9 per cent.
Cattle placements during April were 127 per cent of April 2020. That compares with market expectations for 122.5 per cent.
— Mark Weinraub is a Reuters commodities correspondent in Chicago.
