CME hog futures slump as Wall Street tumbles; live cattle firm

By Theopolis Waters

CHICAGO, Sept 25 (Reuters) – Chicago Mercantile Exchange lean hogs closed lower on Thursday, pressured by active U.S. stock market selling as the dollar surged to a four-year high, traders and analysts said.

The strong dollar makes U.S. goods including pork less attractive to foreign buyers.

Losses in hog futures mounted after nearby trading months drifted below moving-average support levels, which triggered fund selling.

Fundamentally, investors remain skittish about slaughter-ready hog prices and pork at wholesale as supplies, and animal weights, start to rise seasonally.

Thursday morning’s average hog price in Iowa-Minnesota gained 69 cents per hundredweight (cwt.) from Wednesday to $108.26, but dipped 10 cents in the eastern Midwest to $101.10, the U.S. Department of Agriculture said.

USDA data showed the morning’s wholesale pork price declined 15 cents per cwt from Wednesday to $117.28.

Investors adjusted positions before the government’s quarterly hog report on Friday.

Analysts expect the report to show impact from the deadly pig virus and possible herd expansion caused by high hog prices and low-cost feed.

October hogs closed 1.125 cents per pound lower at 106.325 cents, after returning above the 100-day moving average of 106.13 cents.

December ended at 93.600 cents, down 1.600 cents, and clawed back above the 40-day moving average of 92.47 cents.


CME live cattle gained modestly, supported by short covering after recent losses and October’s discount to last week’s cash prices, traders said.

October live cattle finished up 0.125 cent per lb. at 155.450 cents, and December was 0.325 cent higher at 159.100 cents.

Last week, market-ready, or cash, cattle in the U.S. Plains moved at mostly $159 to $160 per cwt.

This week, investors look for packers to keep a lid on cash prices based on their unprofitable margins and lackluster wholesale beef demand.

An isolated cash cattle bid developed in Kansas at $157 per cwt against sellers asking $161 to $162, a feedlot source said.

Thursday’s beef packer margins were a negative $85.95 per head, compared with a negative $88.50 on Wednesday and a negative $66.70 a week ago, according to Colorado-based analytics firm

The morning’s choice wholesale beef price was up 22 cents per cwt. from Wednesday to $239.35. Select dropped 52 cents to $225.79, USDA said.

Some traders bought deferred live cattle months in anticipation of tight numbers, said K&S Financials analyst Jack Salzsieder.

CME feeder cattle finished weak on profit-taking after some trading months spiked to new contract highs.

September, which expired at noon CDT (1700 GMT), settled at 230.875 cents, down 0.200 cent.

October closed 0.300 cent lower at 230.100 cents. It posted a fresh contract high of 231.325 cents in electronic trading.

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