By Theopolis Waters
CHICAGO, Feb 23 (Reuters) – Chicago Mercantile Exchange lean hogs finished higher on Monday on strong cash prices and the resumption of cargo loading following Friday’s U.S. west coast port labour agreement, traders said.
CME hogs drew more support from the dock worker deal because the United States exports more pork than beef and poultry.
Monday morning’s average market-ready or cash hog price in Iowa/Minnesota surged $3.29 per hundredweight (cwt) from Friday to $63.01, the U.S. Department of Agriculture said.
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Plunging temperatures and wintry weather from the Midwest to the Atlantic states curbed meat demand and snarled livestock deliveries to packing plants in the area.
Despite futures’ rally, some investors were reluctant to proclaim that cash prices have bottomed out seasonally.
A surplus of hogs remain and there has yet to be a significant increase in product prices, said Craig VanDyke, analyst with Top Third Ag Marketing.
USDA data showed the morning’s wholesale pork price at $72.48 per cwt., up 98 from Friday.
CME lean hogs’ premium to the exchange’s hog index for Feb. 19 at 60.27 cents limited advances.
April futures closed up 0.925 cents per pound to 68.325 cents, and May 0.950 cent higher at 78.250 cents.
CATTLE FUTURES DROP
CME live cattle contracts posted losses on sell stops and last week’s lower cash prices, traders said.
February closed down 0.675 cent per lb. to 156.025 cents, and April 1.425 cents lower at 147.100 cents.
Last week, cash cattle the U.S. Plains fetched $158 to $160 per cwt., as much as $4 lower than the week before, feedlot sources said.
Packers curtailed slaughter rates to lessen cash spending while boosting wholesale beef prices, traders and analyst said.
Monday morning’s choice wholesale beef price rose 45 per cwt to $240.76 per cwt. from Friday. Select cuts rose $1.70 to $239.49, based on USDA data.
Beef demand could weaken as grocers buy product hand-to-mouth during Lent while eying plentiful less-expensive pork and chicken.
Futures were further pressured by Friday’s USDA Cattle-On-Feed report that showed more animals placed in feedyards last month than expected.
Investors also cited Friday’s government’s cold storage report in which the record-high January beef inventory partly reflected West Coast port delays.
CME feeder cattle closed in sympathy with lower live cattle futures.
March closed 1.100 cents per lb. lower at 198.075 cents, and April down 1.300 cents to 197.050 cents.
