CHICAGO, Ill. (Reuters) — Chicago Mercantile Exchange lean hogs rose for a fifth session in a row today, helped by short-covering in response to rising prices for market-ready or cash hogs, traders said.
April futures closed .25 cents per pound higher at 68.575 cents, and May up .8 cents to 79.05 cents.
The morning’s average cash hog price in Iowa/Minnesota rose $2.19 per hundredweight from yesterday to $64.60, the U.S. Department of Agriculture said.
Midwest hog farmers withheld deliveries while keeping swine buildings closed to ward off bone-chilling temperatures, hog dealers said.
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Producers are unwilling to risk losing livestock by trucking them to packing plants in dangerously cold wind chills, they said.
Fund buying developed after the April contract surpassed the 20-day moving average of 68.26 cents.
CME lean hogs’ upward momentum periodically stalled after investors took profits, partly based on futures’ premiums to the exchange’s index for Feb. 20 at 60.40 cents.
Except the February contract, CME live cattle futures closed lower for a fourth consecutive session on steady or weaker cash price expectations, traders said.
February, which will expire on Friday, ended .625 cents per lb. higher at 156.65 cents, but April closed 1.525 cents lower at 145.575 cents and June down 1.275 cents to 138.925 cents.
“Some people have come to the conclusion that we’ve gone from a bull to bear market,” R.J. O’Brien floor manager Jim Brooks said regarding futures’ recent selloff.
Packers have not responded to U.S. Plains feedlot offers to sell cash cattle at $162 per cwt. Last week, cash cattle moved at $158 to $160.
Processors have cut slaughter rates to keep a lid on cash spending. The strategy pumped up prices for wholesale beef, making it less competitive with cheaper pork and chicken.
This morning’s choice wholesale beef price rose $2.39 per cwt. to $243.47 per cwt. from yesterday. Select cuts climbed $2.63 to $242.01, based on USDA data.
April and June futures drifted beneath their recent respective session lows of 146.65 cents and 139.7 cents, which earlier sent both contracts to their lowest level in nine months.
CME feeder cattle felt pressure from sell stops, live cattle market liquidation and sharply lower cash feeder cattle prices.
March closed 2.475 cents per lb. lower at 195.6 cents, and April ended down 2.425 cents to 194.625 cents.
