By Theopolis Waters
CHICAGO, April 10 (Reuters) – Chicago Mercantile Exchange hogs settled mostly lower on Thursday following a choppy day of trading.
Lead-month April hogs, which will expire on April 14, drew support from its discount to CME’s hog index at 128.62 cents.
Profit-taking stirred by nervousness about cash hog prices in the near-term pressured remaining contracts.
The morning’s average hog price in the closely-watched Iowa-Minnesota market plunged $3.55 per hundredweight (cwt) from Wednesday to $120.22, according to the U.S. Department of Agriculture.
“Maybe we’re seeing a little bit of pressure on the cash hog side partially related to reduced kills on Friday and possibly during next week’s Easter holiday,” said Allendale Inc chief strategist Rich Nelson.
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Packers have sharply cutback Friday production after the deadly Porcine Epidemic Diarrhea virus reduced the number of hogs available for slaughter.
Processors were reluctant to hike cash bids as pork cutout values struggled, pressured by heavier hogs that increased the flow of pork to retailers and other end users.
The morning’s wholesale pork price dropped $1.12 per cwt. from Wednesday to $125.83, led by the $6.74 per cwt slump in rib costs, USDA said.
April hogs closed up 0.150 cent per lb. to 125.175 cents, and above the 20-day moving average of 124.338 and below the 10-day moving average of 125.365 cents.
June ended 0.600 cent lower at 121.150 cents, and July finished at 117.300 cents, down 0.350 cent.
LIVE CATTLE MOSTLY WEAK
Most CME live cattle contracts lost ground on profit-taking in anticipation of a seasonal bump in supplies ahead, traders said.
April was supported by its discount to last week’s cash returns, despite sentiment for steady to lower cash cattle prices this week.
“I’d be surprised if we’re actually able to hold steady this week,” said Nelson, citing poor packer margins, more cattle for sale and generally lower wholesale beef prices.
Cash cattle bids in the U.S. Plains ranged from $146 to $147 per cwt. against $150 asking prices, feedlot sources said. Last week, cash cattle moved at $148 in Texas and Kansas and at $150 in Nebraska.
The morning’s wholesale choice beef price gained 33 cents per cwt. from Wednesday to $225.79. Select cuts slipped 38 cents to $214.85, based on USDA data.
Beef packer margins for Thursday was an estimated negative $120.15 per head, compared with a negative $111.20 on Wednesday and a negative $82.50 a week ago, as calculated by Colorado-based analytics firm HedgersEdge.com.
April live cattle closed up 0.250 cents per lb. to 144.000 cents.
June ended 0.425 cent lower at 135.200 cents, and below the 40-day moving average of 135.668 cents. August settled 0.150 cent lower at 133.125 cents.
Mostly weak CME live cattle and profit-taking pressured feeder cattle futures.
April closed 0.600 cent per lb. lower at 178.275 cents, and May ended down 0.550 cent to 179.675 cents.
