CHICAGO, Oct 19 (Reuters) – Chicago Mercantile Exchange lean hog futures rose on Thursday, hitting their highest level in two months led by steadily climbing prices for market-ready, or cash, hogs as packers competed for supplies, said traders.
December hogs finished 0.500 cent per pound higher at 64.250 cents, and February ended 0.475 cent higher at 68.475 cent.
Daily hog slaughters have consistently made new records, partly because new pork processing plants in operation are buying animals to maintain market share and make good on meat orders, a trader said.
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Soon farmers may be faced with less money for their hogs as higher prices for them wear down packer profits, and retailers switch to promoting more beef following the conclusion of October National Pork month, a trader said.
Nearby CME live cattle settled modestly lower, pressured by this week’s less-than-expected cash prices and caution before the U.S. Department of Agriculture’s monthly Cattle-On-Feed report on Friday, said traders.
“The market was just biding time until Friday’s report,” said Oak Investment Group President Joe Ocrant.
October live cattle, which will expire on Oct. 31, finished 0.275 cent per pound lower at 111.200 cents. Most actively-traded December closed down 0.500 cent to
116.150 cents.
This week packers paid mostly $110 per cwt for cash cattle in the U.S. Plains that a week earlier moved at $111, said feedlot sources.
Processors balked at paying more for supplies after two or three weeks of higher cash prices trimmed their margins, although those profits remain high historically, said analysts and traders.
They said processors have ample supplies now, but those numbers could decline after some ranchers and feedlots moved animals to market ahead of schedule to avoid possibly lower prices in the weeks ahead.
Buy stops and technical buying pulled up CME feeder cattle contracts. Feeder cattle futures’ discounts to CME’s feeder cattle index for Oct. 18 at 155.08 cents provided added market support.
October ended up 0.625 cent per pound to 153.150 cents.
