LIVESTOCK-CME hog futures settle mostly lower before USDA report

CHICAGO, Sept 28 (Reuters) – Most Chicago Mercantile Exchange lean hog contracts closed lower on Thursday, pressured by profit-taking ahead of the U.S. Department of Agriculture’s quarterly hog report at 2 p.m. CDT (1900 GMT).             

“The industry will no doubt show herd expansion and record large production, it’s just a question of how much,” said Archer Financial Services broker Dennis Smith. 

Thursday morning’s modest uptick in prices for slaughter-ready or cash hogs, along with wholesale pork values, underpinned October hog futures, traders said.      Until Wednesday, hog prices have come down for more than two months, pressured by ample supplies of heavier animals, said analsyts and traders.           

They said solid U.S. export data further supported the October contract.

On Thursday, the USDA’s export sales report for the week ended Sept. 21 showed U.S. pork sales at 36,700 tonnes, the highest this year, mostly to Mexico.

Exports is a necessary ingredient if the United States is going to keep hog prices from collapsing in the face of record-large production, said Smith.

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October hogs ended up 0.150 cent per pound to 55.550 cents. December finished 1.375 cents lower at 58.275 cents and February closed 1.050 cents lower at 63.350 cents.

FIRMER CATTLE FUTURES

CME live cattle gained slightly as bullishly cautious investors priced in the chance that packers might pay the same for cattle as last week, said traders.

October led other contracts after market participants periodically bought that month and simultaneously sold deferred contracts.

October live cattle finished 0.400 cent per pound higher at 108.975 cents, and December closed up 0.150 cent to 115.050 cents.

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On Thursday, Kansas processors raised cash bids to $106 per cwt from $104 as sellers there and elsewhere in the U.S. Plains held out for at least $110. Cash cattle last week fetched $108 to $109.

Packers are operating plants with excellent margins, but they seem less eager to buy cattle after purchasing a large number of them last week, a trader said.

He added that the late-summer seasonal decline in beef demand has stabilized, but could struggle to gain upward traction as hams and turkeys for the year-end holidays dominate meat industry discussions.   Slight live cattle futures gains lifted CME feeder cattle contracts.

September, which expired at noon CDT (1700 GMT), settled up 0.375 cent per pound to 152.775 cents. Most actively traded October ended up 0.250 cent to 152.950 cents.

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