By Theopolis Waters
CHICAGO, Nov 18 (Reuters) – Chicago Mercantile Exchange lean hogs closed lower on Tuesday, weighed by the drop in prices in the cash hog market and pork at wholesale, traders said.
December closed 1.450 cents per pound lower at 91.550 cents, and February down 1.500 cents at 91.125 cents.
The morning’s average hog price in Iowa-Minnesota slumped $2.76 per hundredweight (cwt) from Monday at $84.38, the U.S. Department of Agriculture said.
Separate USDA data showed the morning’s wholesale pork price dropped $1.07 per cwt. from Monday to $94.52, led by the $5.86 decline in ham costs.
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U.S. livestock: Cattle futures come down from highs
Cattle futures on the Chicago Mercantile Exchange were weaker on Monday, coming down from recent highs.
A few packers need hogs to round out this week’s production. But, others are expected to scale back purchases with plants expected to closed for the Thanksgiving holiday.
Processors discounted ham prices to generate buying interest among retailers who have most of what they need for Thanksgiving advertisements.
Fund selling developed earlier after December and February slipped below their respective 40-day and 100-day moving averages of 91.53 and 91.24 cents.
MIXED LIVE, FEEDER CATTLE
CME live cattle futures ended mixed pressured by cash price caution, but supported by positioning before USDA’s monthly Cattle-On-Feed report on Friday.
Most analysts expect Friday’s report to show a year-over-year decline in October cattle placements due to expensive calves that discouraged feedyards from buying them.
December closed down 0.175 cent per lb. at 170.825 cents, and February at 172.075 cents down 0.025 cent. April closed up 0.275 cent at 170.000 cents, and June 0.325 cent higher at 161.100 cents.
Investors are unsure about this week’s cash prices after some packers paid a record-high $172 per cwt. for supplies last week.
Fewer cattle for sale is supportive for futures. But, packers may not need as many cattle while buying for the holiday-shortened workweek.
In a trading strategy known as bull spreads, CME feeder cattle investors bought November futures and sold January as back-month live cattle futures gained.
November closed up 0.400 cent per lb at 240.425 cents, and January was down 0.200 cent at 237.275 cents.
