Chicago | Reuters — Chicago Mercantile Exchange lean hogs finished higher on Friday after short covering and bargain buying pared some of the market’s recent losses tied to fears about NAFTA negotiations, said traders.
On Wednesday, Mexico said it would withdraw from the North American Free Trade Agreement, following Canadian government worries that the U.S. may exit the trade talks.
Mexico is the top destination for U.S. pork while Canada is ranked No. 4, according to industry data.
February hogs settled up 0.6 cent/lb. at 71.575 cents. April ended 0.5 cent higher at 74.325 cents.
Uneasiness about near-term prices for slaughter-ready, or cash, hogs limited market advances.
Processors are expected to pay less for hogs with some plants closed on Monday’s Martin Luther King, Jr. Day holiday, while others focus on trying to stop declining profit, said analysts and traders.
They said pork values rose on Friday led by sharply higher costs to store pork bellies that will be taken out of warehouses for use this spring and summer.
Live cattle ends firmer
Buy-stops and pre-weakened short covering lifted CME live cattle futures, said traders.
They said the return of wintry weather in the U.S. Plains contributed to futures advances. Cold temperatures slow animal weight gains and frozen precipitation makes it difficult to transport livestock to packing plants.
February live cattle finished up 0.3 cent/lb. at 117.375 cents. April ended up 0.575 cent at 119.45 cents.
Investors anxiously await next week’s slaughter-ready, or cash, cattle prices after packers paid less for supplies recently.
Since late last week, cash cattle in the U.S. Plains brought $118-$120/cwt versus $123 the week before.
Bullish investors contend that higher packer profit bodes well for cash prices next week.
Market bears expect increased supplies and softer wholesale beef values to pressure cash returns.
Buy-stops and higher live cattle futures boosted CME feeder cattle contracts.
January feeder cattle closed 0.525 cent/lb. higher at 144.350 cents.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.