CHICAGO, April 6 (Reuters) – Chicago Mercantile Exchange lean hogs closed higher on Thursday after bargain buying lifted futures from four-month lows, said traders.
They said buy stops and deferred-month technical buying furthered market advances.
April hogs ended up 0.300 cent per pound to 63.925 cents, and May 1.200 cents higher at 69.550 cents.
“We (futures) got cheap,” said independent hog futures trader Bill Cipolla. He cited futures’ selloff prior to and after last Thursday’s U.S. Department of Agriculture quarterly hog report.
The USDA’s hog report showed a record-large hog herd as of March 1, which suggests plentiful supplies ahead.
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Fallen cash hog and wholesale pork prices, as supplies grow seasonally, stirred bear spreads. The spreads consisted of investors who sold April futures and simultaneously bought deferred months.
Thursday afternoon’s average slaughter-ready, or cash, hog price in Iowa/Minnesota at $60.78 per cwt fell 63 cents from Wednesday, the USDA said.
U.S. government data on Thursday afternoon showed the average wholesale pork price at $74.11 per cwt, down 76 cents from Wednesday, mostly due to $4.90 lower pork bellies.
The USDA estimated Monday through Thursday’s total combined hog slaughter at 1.777 million head, up 5,000 from last week and 94,000 more than a year earlier.
CME live cattle pared recent losses with support from buy stops and futures’ discounts to expected cash prices this week, said traders.
April live cattle closed 0.525 cent per pound higher at 118.800 cents, and June 0.700 cent higher at 110.125 cents.
Kansas and Nebraska packers tabled $122 per cwt bids for cash cattle that were priced up to $130, said feedlot sources. Cash cattle in the U.S. Plains last week brought mostly $128 to $130.
The fact that no cattle sold at Wednesday’s Fed Cattle Exchange suggests packers might have enough near-term supplies, a trader said.
Negative packer margins, tepid wholesale beef demand and more cattle for sale than last week are bearish cash influences, said traders and analysts.
Thursday afternoon’s average wholesale beef price fell $1.81 per cwt to $207.90 from Wednesday. Select cuts were down 23 cents to $200.28, the USDA said.
Thursday’s average beef packer margins were a negative $10.35 per head, down from a negative $3.40 for Wednesday, as calculated by HedgersEdge.com.
Technical buying and live cattle futures gains pulled up CME feeder cattle.
April feeder cattle closed 1.425 cents per pound higher at 131.950 cents.
