By Theopolis Waters
CHICAGO, March 28 (Reuters) – Chicago Mercantile Exchange hog futures settled firmer on Friday after a volatile day of trading before the highly anticipated U.S. Department of Agriculture quarterly hog report at 2 p.m. CDT.
Analysts’ estimates for USDA’s Friday report varied widely, reflecting uncertainty about how much the data will account for the impact of Porcine Epidemic Diarrhea virus (PEDv) on U.S. farms in recent months.
“I don’t think anyone has a clear advantage over anyone else knowing what this report is going to say,” Sterling Marketing Inc President John Nalivka said.
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U.S. livestock: Cattle futures come down from highs
Cattle futures on the Chicago Mercantile Exchange were weaker on Monday, coming down from recent highs.
Steady to firm cash hog and wholesale pork prices underpinned the April contract. Investors also simultaneously sold April and bought June futures in a trading strategy known as spreads.
The Friday morning average hog price in the eastern Midwest region was up 90 cents per hundredweight from Thursday at $124.64, according to USDA data. Prices elsewhere in the Midwest were unavailable.
The morning’s wholesale pork price rose 18 cents per cwt. from Thursday to $130.93, USDA said.
April hogs closed up 0.100 cents per pound at 125.575, after spiking to a new contract high of 127.300 cents. June hogs finished up 0.275 cent at 129.575 cents.
MOSTLY WEAK LIVE CATTLE
CME live cattle closed mostly weak after investors bought the April contract and at the same time sold deferred months in spread trading, traders said.
April futures drew support from its discount to this week’s record high prices for slaughter-ready cash cattle, a trader said. Lower wholesale beef values and profit-taking limited futures’ advances, he said.
The early wholesale choice beef price tumbled $2.82 per cwt. from Thursday to $236.43. Select cuts dropped 73 cents to $230.48, based on USDA data.
This week, cash cattle in Texas and Kansas traded at a record high of $152 per cwt, and Nebraska cash cattle hit a $154 record, feedlot sources said.
Lower wholesale beef prices and record-high cattle prices trimmed packer margins.
HedgersEdge.com calculated the beef packer margins for Friday at an estimated negative $28.05 per head, compared with a negative $4.85 on Thursday and a positive $10.30 a week ago.
April live cattle closed up 0.025 cent per lb. at 146.500 cents. June ended down 0.175 cent at 138.350 cents, and August finished 0.350 cent lower at 135.075 cents.
Profit-taking and back-month CME live cattle losses undercut feeder cattle futures.
April closed 1.150 cents per lb. lower at 178.350 cents, and May ended down 0.375 cent at 179.500 cents.
