CHICAGO, Oct 3 (Reuters) – Chicago Mercantile Exchange lean hog futures gained for a second day in a row on Tuesday, strengthened by rising prices for market-ready, or cash, hogs and the morning’s firmer wholesale pork values, said traders.
They said October futures led advances after investors actively bought that contract and simultaneously sold deferred months, they said. October hogs, which will expire on Oct. 13, ended 2.625 cents per pound higher at 59.875 cents, and above the 20-day moving average at 58.730 cents.
Most actively traded December finished up 0.100 cent to 62.075 cents.
Some packers bought hogs to round out inventories heading into the second half of the week, while a few others raised cash bids to divert Midwest farmers’ focus from harvesting crops, traders and analysts said.
The cash market tends to find some strength when farmers conduct fieldwork during the spring and fall, said Midwest Marketing Solutions analyst Brian Hoops.
“There has been a lot of producers, up until this rain event, that have been very busy trying to combine corn and soybeans,” he said.
Wholesale pork values garnered periodic support from grocers that are featuring product during National Pork Month in October.
LIVE CATTLE RALLIES
Short-covering, sparked by Tuesday morning’s higher wholesale beef values, rallied CME live cattle from Monday’s lows, said traders. They said fund buying furthered market advances, despite possibly steady-to-lower cash prices this week.
October live cattle finished 1.275 cents per pound higher at 109.100 cents, and above the 200-day moving average of 108.932 cents. December closed 1.475 cents higher at 114.900 cents, and over the 100-day moving average of 114.552 cents.
Market participants await Wednesday’s Fed Cattle Exchange (FCE) sale of more than 1,700 animals to set the pace for this week’s cash cattle prices. The FCE reported no sales last week.
A week ago, most of the cash cattle in the U.S. Plains brought $108 per cwt.
Market bulls cited extremely profitable margins and the uptick in wholesale beef prices as incentives for packers to pay up for supplies this week. Contrarians point to 15,000 more cattle for sale than last week and availability of animals contracted against the futures market for potential cash price pressure.
Feeder cattle futures at the exchange snapped back from Monday’s selloff helped by short-covering, fund buying and live cattle futures’ turnaround.
October ended 2.075 cents per pound higher at 152.425 cents.