CHICAGO, April 3 (Reuters) – Chicago Mercantile Exchange lean hog futures fell on Monday, pressured by concerns that the seasonal bump in supplies might further hurt cash prices and curb retail pork buying, said traders.
They said sell stops and fund liquidation hastened hog market losses.
April hogs ended 0.875 cent per pound lower at 64.800 cents, and below the 200-day moving average of 65.410 cents. May finished down 0.450 cent to 69.400 cents.
Packers are expected to cut back Saturday kills to protect their margins and in anticipation of possible easing product demand through the Easter holiday, said Hehmeyer Trading + Investments senior hog futures trader Tom Cawthorne.
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For the week ending August 30, Western Canadian feeder cattle markets traded $4-$8/cwt higher on average. Quality yearling and calf packages were up as much as $15/cwt in some cases.
Slaughter-ready, or cash, hog prices have declined over the past seven sessions as supplies grow seasonally.
Monday afternoon’s average cash hog price in Iowa/Minnesota at $62.19 per cwt slipped 19 cents from Friday, according to the U.S. Department of Agriculture.
USDA estimated that packers on Monday processed 443,000 hogs, up 2,000 from last week and 9,000 more than a year earlier.
Separate U.S. government data on Monday afternoon showed the average U.S. wholesale pork price 49 cents per cwt higher than on Tuesday at $75.89.
Monday’s average pork packer margins were a positive $21.55 per head, up from a positive $19.75 for Friday, as calculated by HedgersEdge.com.
CME nearby live cattle contracts finished weaker after investors sold April futures and simultaneously bought deferred months in anticipation of softer cash prices this week, said traders.
April live cattle closed 0.525 cent per pound lower at 119.425 cents, and June down 0.175 cent to 110.700 cents.
Processors may avoid bidding up for cattle after margins slipped into the red, a trader said. Grocers are not buying large amounts of beef knowing cattle numbers will soon pick up seasonally, he said.
Monday afternoon’s average wholesale beef price was 69 cents per cwt lower than on Friday at $213.43. Select cuts fell $2.65 to $201.35, the USDA said.
Last week most market-ready, or cash, cattle in the U.S. Plains fetched $128 to $130 per cwt versus $130 to $134.50 in the previous week.
Profit-taking, softer front-month live cattle futures and $1 to $3 per cwt lower cash feeder cattle prices pulled down CME feeder cattle contracts.
April feeder cattle closed 0.875 cent per pound lower at 133.075 cents.
