By Theopolis Waters
CHICAGO, Jan 22 (Reuters) – Chicago Mercantile Exchange lean hogs drifted to a two-year low for a third straight session on Thursday, pressured by the steep drop in cash and wholesale pork prices, traders said.
February closed 0.750 cents per pound lower at 71.600 cents, and April fell 1.350 cents to 72.875 cents.
Thursday morning’s average price of slaughter or cash hogs in Iowa/Minnesota slumped $2.66 per hundredweight (cwt) from Wednesday to $68.42, according to the U.S. Department of Agriculture.
Separate USDA data showed the morning’s wholesale pork price had fallen $2.48 from Wednesday to $84.56 per cwt.
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Packers have enough supplies to accommodate Saturday’s estimated 180,000-plus head kill to make up for some plants that were closed for Monday’s Martin Luther King, Jr. holiday, an analyst said.
Retailers are buying small amounts of pork due to ample supplies, he said.
Market bulls still cling to the prospect of a seasonal turnaround in cash prices, which briefly stirred early-session buying.
USDA will issue the monthly cold storage report at 2 p.m. CST that will include total December beef and pork inventories.
A few analysts, on average, estimated total beef stocks last month at 395.9 mln lbs, and pork stocks at 483.6 mln lbs.
WEAK LIVE CATTLE CLOSE
CME live cattle futures posted modest losses on positioning before USDA’s monthly cattle report on Friday, traders said.
Analysts expected Friday’s report to show fewer cattle were placed in feedlots in December.
February live cattle closed 0.350 cent per lb. lower at 153.350 cents, and April down 0.075 cent to 151.800 cents.
Weaker slaughter or cash cattle prices and soft wholesale beef demand wiped out initial futures gains.
Cash cattle in Kansas and Nebraska sold at $158 to $160 per cwt., down from mostly $162 to $164.50 last week, feedlot sources said.
Investors are eying wintry weather in the Texas Panhandle which might support cash prices in the region.
The morning’s Choice wholesale beef price fell $1.28 per cwt. from Wednesday to $255.91. Select rose 71 cents to $249.12, USDA said.
Futures weighed on cash prices while grocers balked at near-record high beef costs, a trader said.
CME feeder cattle finished higher on short-covering, weak corn prices and deferred-month live cattle futures buying.
January closed up 0.275 cent per lb. to 215.975 cents and March at 206.325 cents, up 1.025 cents.
