Chicago | Reuters — Chicago Mercantile Exchange lean hog futures rebounded from the prior day’s losses on Tuesday on stronger cash pork prices and a weaker dollar, and as corn feed values fell sharply.
Feeder cattle contracts also posted strong gains as benchmark corn futures on the Chicago Board of Trade plunged more than five per cent, while live cattle futures were flat to slightly firmer as beef prices edged higher.
CME June hog futures jumped 1.9 cents to 115.25 cents/lb., the highest for a front-month contract since August 2014 (all figures US$). Actively traded July hogs added 2.175 cents to settle at 117.5 cents/lb.
CME August live cattle futures were unchanged at 120.1 cents/lb. while August feeder cattle gained 2.55 cents to end at 156.675 cents/lb., a nearly-six-week high.
Hog futures resumed their recent climb to multi-year highs as easing coronavirus pandemic restrictions propelled restaurant demand for pork while warmer weather ushered in the outdoor grilling season, lifting retail demand.
Pork exports, meanwhile, benefited from a weakening U.S. dollar, which enhances the buying power of those holding other currencies.
“The pork cutout is up again today… and the cheaper dollar is helping on the hogs as well,” said Matthew Wiegand, broker with FuturesOne. “And you had this big pullback in feed values, which adds some strength in the back-month contracts.”
Corn prices fell sharply on Tuesday as rain across the Midwest and Plains farm belts boosted the recently planted crop, with further precipitation expected in the coming days.
The cash pork carcass cutout value on Tuesday jumped $2.31, to $124.52/cwt, the highest in nearly seven years, according to U.S. Department of Agriculture data.
— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago.