By Theopolis Waters
CHICAGO, March 26 (Reuters) – Chicago Mercantile Exchange lean hogs finished higher on Thursday, driven partly by short-covering following a spike in wholesale pork values, traders said.
April closed 1.150 cent per pound higher at 60.975 cents, and May up 1.500 cents at 68.025 cents.
The morning’s wholesale pork price jumped $1.51 per hundredweight (cwt) from Wednesday to $68.33, led by $5.67 higher picnic hams, according to the U.S. Department of Agriculture.
Hams are popular for Easter meals, and some retailers may be showing interest in ribs for spring grilling, a trader said.
Fund buying and buy stops contributed to gains in the face of ample supplies pressuring prices for market-ready or cash hogs.
From Monday to Thursday, packers processed 1.733 million hogs, 11,000 more than last week, according to USDA data.
Separate government figures showed the morning’s average hog price in Iowa-Minnesota was $55.10 per cwt., down $1.10 from Wednesday.
Caution before Friday’s USDA quarterly hog report limited back-month advances.
LIVE CATTLE EASE
CME live cattle ended weaker on profit-taking while awaiting cash price direction, traders said.
April closed down 0.050 cent per lb. at 161.675 cents, and June 0.375 cent lower at 152.000 cents.
No packer bids were reported with feedlots pricing cattle at $166 to $167 per cwt., industry sources said. Last week, cash cattle sold at $163 to $165.
Investors believe packers need cattle, despite cutting slaughters that recently sent wholesale beef higher, which improved their margins.
Thursday morning’s Choice wholesale beef price was up 45 cents per cwt from Wednesday at $250.96. Select cuts gained 12 cents to $247.26, USDA said.
Live cattle futures investors, who simultaneously trade lean hog contracts, moved toward the sidelines while waiting for Friday’s government hog report.
“You’ve got the hog report tomorrow that looks a little bearish,” A&A Trading broker Jim Clarkson said.
USDA’s quarterly hog surveys on occasion influence cattle futures more than the sometimes neutral monthly cattle on feed report results, he said.
CME March feeder cattle, which expired at noon CDT, settled at 217.450 cents per lb., down 250 cents. That was nearly in line with the exchange’s latest feeder cattle index at 217.63 cents.
Other contracts were pressured by live cattle weakness and technical selling.
April, the new lead month, closed down 0.025 cent at 217.225 cents, and May 0.200 cent lower at 215.775 cents.