CHICAGO, Oct 23 (Reuters) – Chicago Mercantile Exchange lean hogs closed lower on Monday, pressured by profit-taking following the morning’s cash price drop, traders said.
December hogs finished 1.325 cents per pound lower at 63.525 cents, and February ended 0.875 cent lower at 68.225 cents.
Some investors sold futures after analysts predicted a 480,000-plus head hog slaughter on Monday. The U.S. Department of Agriculture estimated last Monday’s kill at 446,000 head.
“Monday’s big kill was due to a major Midwest packer making up downtime after being closed a couple of days last week for repairs,” a hog merchant said. The facility actually slaughtered on Sunday and USDA added those numbers into Monday’s data, he said.
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The merchant was skeptical that Monday morning’s lower cash prices signaled a market top because of the low sales volume.
Wholesale pork demand has held steady during October, National Pork Month. Grocers are preparing to advertise more beef in early November, said analysts and traders.
Most CME live cattle contracts closed up slightly after investors bought deferred months and simultaneously sold October futures that will expire on Oct. 31, said traders.
As the session progressed, futures shrugged off early losses, led by last Friday’s bearish USDA monthly Cattle-On-Feed cattle report.
October live cattle finished down 0.150 cent per pound at 111.525 cents. Most actively traded December closed up 0.150 cent at 116.750 cents. February ended
The October contract also factored in last week’s $110 to $111 per cwt cash cattle sales in the U.S. Plains. Cattle there a week earlier brought mostly $111.
Market bulls expect steady-to-better cash prices this week because of good packer margins and increased beef demand next month.
Bearish traders believe some processors will resist spending more for cattle with the prospect of a supply buildup through the rest of the year – as implied by Friday’s USDA cattle report.
Higher corn futures and steady-to-lower cash feeder cattle prices weighed on CME live cattle.
October ended unchanged at 153.625 cents per pound, and November 1FCX7 closed down 0.350 cent to 152.725 cents.
