By Theopolis Waters
CHICAGO, May 7 (Reuters) – Chicago Mercantile Exchange hog futures fell on Wednesday pressured by lower cash hog prices, traders said.
The morning’s hog price in Iowa-Minnesota fell $2.41 per hundredweight (cwt) from Tuesday to $111.72, according to the U.S. Department of Agriculture.
“The trade is still concerned that it’s still going to be a few more weeks before we see the next pig virus wave of slaughter problems,” said Rich Nelson, a chief strategist at Allendale Inc.
Futures’ price premium to CME’s hog index, at 113.98 cents, discouraged buyers.
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Funds rolled hog and live cattle June positions into back months . Wednesday was the first of five days for the index roll period.
Recent market setbacks might generate short-covering and bargain hunting on Thursday, a trader said.
Investors are monitoring ongoing negotiations between JBS and employees at its Worthington, Minnesota, hog plant after workers on Tuesday approved a strike vote over wages and health benefits.
May hogs closed 0.825 cent per pound lower at 115.225.
Most-actively traded June fell 2.050 cents to 121.175 cents.
CATTLE DOWN WITH BEEF
CME live cattle sagged on profit-taking, weighed by lower wholesale beef values that might pressure cash prices this week, traders said.
The wholesale Choice beef price early on Wednesday dropped 45 cents per cwt from Tuesday to $227.43. Select cuts slipped 13 cents to $213.43, based on USDA data.
Cash cattle bids in Texas and Kansas were at $144 per cwt, feedlot, sources said.
Last week, cash cattle in Texas and Kansas sold at $146 per cwt, with sales of $147 to $150 in Nebraska.
The industry is bracing for a seasonal increase in cattle supplies around the middle of May, said Nelson.
The break in cool, damp weather that delayed the start of the spring grilling season could ignite beef demand, traders and analysts said.
Speculative buyers may buy CME live cattle futures on Thursday based on their discounts to recent cash cattle returns, they said.
June ended at 137.575 cents, down 0.725 cent, and August 0.525 cent lower at 137.400 cents.
Profit-taking and lower CME live cattle feeder erased initial feeder cattle futures gains.
May closed 0.450 cent per lb lower at 183.025 cents. August ended down 0.575 cent to 190.675 cents.
