By Theopolis Waters
CHICAGO, Jan 28 (Reuters) – Chicago Mercantile Exchange lean hogs closed sharply higher Wednesday on short-covering that earlier drove futures to their biggest one-day gain in four months at over two percent. The electronic is currently trading and is up 1.8 pct.
February closed 2.100 cents per pound higher at 71.525 cents, and April up 2.900 cents to 74.950 cents. May and June settled up the 3.000-cent per lb. price limit at 80.925 cents and 84.575 cents, respectively.
Bullish investors look for cash and wholesale pork prices to improve after meat demand resumes in the U.S. North East as the region recover from a blizzard.
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Wednesday morning’s average market-ready or cash hog price in Iowa/Minnesota dipped nine cents per hundredweight (cwt.) from Tuesday to $67.67, the U.S. Department of Agriculture said.
Separate USDA data showed the morning’s wholesale pork price had slipped 31 cents per cwt. from Tuesday to $81.30.
Progress in labour talks involving West Coast port workers encouraged futures traders. The prolonged work slowdown significantly delayed shipments of U.S. goods, including meat.
“There was finally some good news out there and people ran with it,” a trader said.
April and June futures broke through the 10-day moving average of 74.60 cents and 84.23 cents, which triggered fund buying.
LIVE CATTLE GAIN
CME live cattle closed higher, helped by short-covering that was partly due to the modest turnaround in wholesale beef prices, traders said.
February closed 1.125 cents per lb. higher at 153.950 cents, and April up 0.500 cent to 151.500 cents.
Wednesday morning’s Choice wholesale beef price rose 33 cents per cwt. from Tuesday to $248.03. Select gained 46 cents to $240.72, the USDA said.
Packers recently cut beef prices enough to attract retail buyers, traders and analysts said.
Fund buying developed after February and April punched through their respective 10-day moving averages of 153.15 cents and 151.42 cents.
Futures’ discounts to last week’s prices for cash cattle encouraged buyers.
This week, packers are expected to spend steady or less money for supplies based on their negative margins and current futures prices.
Cash bids surfaced in parts of the U.S. Plains at $156 per cwt with no response from packers, who last week spent $158 to $160 for cattle, feedlot sources said.
CME feeder cattle drew support from lower corn prices, technical buying and live cattle market advances.
January closed 1.675 cent higher at 212.450 cents per lb., and March ended up 0.525 cent to 204.350 cents.
