By Theopolis Waters
CHICAGO, March 3 (Reuters) – The lead Chicago Mercantile Exchange hogs contract spiked to a record high on Monday after tight supplies lifted cash prices, traders said.
Packers in the Midwest hiked cash hog bids as much as $2 per hundredweight to coax pigs off farms pinned down by frigid temperatures and snow-packed county roads, a trader said.
He said supplies appear to have tightened in parts of the Midwest as the Porcine Epidemic Diarrhea virus, which is deadly to piglets, spread on hog farms in the United States and Canada.
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As the harvest in southern Alberta presses on, a broker said that is one of the factors pulling feed prices lower in the region. Darcy Haley, vice-president of Ag Value Brokers in Lethbridge, added that lower cattle numbers in feedlots, plentiful amounts of grass for cattle to graze and a lacklustre export market also weighed on feed prices.
On Monday, packers processed an estimated 413,000 hogs, 14,000 fewer than last week and 17,000 fewer than a year earlier, according the U.S. Department of Agriculture.
Futures at times felt pressure from profit-taking and concern that moderating temperatures later this week would allow delivery of more hogs delayed by harsh weather.
A few investors noted that the start of the Lenten season on Wednesday would dent meat demand heading into the Easter holiday in mid April.
Monday morning’s USDA data showed the wholesale price for pork at $104.96 per cwt., down 15 cents from Friday.
April hogs settled at 108.675 cents per pound, 1.825 cents higher and posted a new contract high of 109.850 cents in electronic trading.
June finished at 112.750 cents, up 0.525 cent, after hitting a new contract high of 114.050 cents.
LIVE CATTLE MIXED
CME live cattle futures settled mixed after a volatile session, while investors awaited this week’s cash trade.
Last week, cash cattle in Texas and Kansas hit a record high $150 per cwt, helped by rising wholesale beef prices. Nebraska topped out at a record $152.
Monday morning’s wholesale choice beef price rose $3.56 per cwt. from Friday to $228.89. Select cuts jumped $4.46 to $227.58, based on USDA data.
Futures were sometimes pressured by profit-taking and mounting tensions in Ukraine that sent the dollar higher and the U.S. stock market sharply lower.
Some CME livestock market investors fretted that hostilities between Russia and Ukraine could scuttle the planned resumption of U.S. pork exports to Russia on March 10, and the possible return of beef there later.
Funds periodically sold their live cattle April long positions and bought the June contract before a similar process, known as the “roll”, expected to be made later this week by followers of the Goldman Sachs Commodity Index.
Funds that follow the index will officially begin that procedure on March 7, and it will last five days.
April live cattle closed 0.850 cents per lb lower at 144.125 cents, and June closed at 134.900 cents, up 0.700 cent.
Higher deferred-month CME live cattle helped feeder cattle futures pare early losses.
March ended up 0.075 cent per lb. at 171.775 cents, and April closed unchanged at 173.075 cents. May settled at 173.725 cents, up 0.025 cent.
