CHICAGO, Oct 3 (Reuters) – Most Chicago Mercantile Exchange lean hog contracts ended sharply higher on Monday, fueled by bargain buying following futures’ plunge by their 3-cent per pound price limit on Friday, said traders.
October, which will expire on Oct. 14, closed down 0.100 cent per pound at 48.925 cents. Most-actively traded December ended 0.200 cent higher at 44.175 cents and February 1.750 cents higher at 50.650 cents.
CME lean hogs will resume their normal 3-cent price limit on Tuesday after failing to settle at the newly expanded 4.5-cent limit on Monday.
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Chicago Board of Trade corn futures extended slight gains on Tuesday as short covering and bargain buying continued to support a rebound from contract lows reached during the previous session.
Futures’ rebound on Monday suggested that last Friday’s steep drop may have accounted for some of the bearish U.S. Department of Agriculture quarterly hog report before it was published, traders and analysts said.
“Friday’s report was not pretty,” a Midwest hog merchant said. “But continued lower cash prices is more about big supplies we have right now than the report.
Monday morning prices for slaughter-ready, or cash, hogs in the U.S. Midwest were 50 cents to $1 per cwt lower, said regional hog merchants.
CME live cattle contracts finished mostly weak after investors sold deferred months and at the same time bought the October contract in a strategy known as bull spreads, said traders.
Short-covering lifted futures from session lows after contracts last Friday settled down their 3-cent per pound price limit in response to disappointing cash prices.
October live cattle ended up 0.025 cent per pound at 98.925 cents. December closed down 0.150 cent at 99.975 cents and February 0.225 cent lower at 100.375 cents.
CME live cattle will return to its normal 3-cent price limit on Tuesday after failing to settle at the expanded 4.5-cent limit on Monday.
Last week, packers paid mostly $103 to $104 per cwt for slaughter-ready, or cash, cattle that brought $105 to $107 a week earlier, said feedlot sources.
“Unfortunately right now it’s just a bad situation. Packers are all booked up and bidding what they want for cattle that are gaining weight,” said Vetterkind Cattle Brokerage President Troy Vetterkind.
CME October feeder cattle drew strength from its discount to the exchange’s feeder cattle index for Sept. 30 at 132.31 cents.
Higher corn futures and lower cash feeder cattle prices pressured other feeder cattle contracts.
October closed 0.825 cents per pound higher at 123.975 cents. November settled down 0.375 cent at 119.275 cents and January 1.025 cents lower at 115.800 cents.
