CHICAGO, Jan 3 (Reuters) – Chicago Mercantile Exchange lean hogs settled lower on Tuesday after profit-taking and fund liquidation dropped futures from an early-session four-month high, said traders.
February hogs ended 2.650 cents per pound lower at 63.500 cents. April closed down 1.175 cents to 66.900 cents.
Both contracts finished below their respective 10-day moving averages of 64.70 and 67.18 cents.
February futures led decliners after investors sold that contract and simultaneously bought deferred months led by softer cash and wholesale pork prices.
Tuesday morning’s wholesale pork price slipped 15 cents per cwt from Friday to $81.62, the U.S. Department of Agriculture said.
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Separate USDA data showed Tuesday morning’s average cash hog price in the western Corn Belt at $51.91 per cwt, $1.74 lower than on Friday.
The subsequent pullback in hogs may have something to do with pork sales after beef found more space in meat cases after the Thanksgiving and Christmas holidays, said Global Commodity Analytics president Mike Zuzolo.
Analysts and traders added that hog supplies may be sufficient for packers after animals backed up on farms over the three-day New Year’s holiday weekend.
CME live cattle contracts bowed to sell stops, profit-taking and technical selling despite the session’s wholesale beef price rebound, said traders.
February live cattle closed 1.175 cents per pound lower at 114.875 cents, and April 0.625 cent lower at 113.950 cents.
Both contracts settled beneath their 10-day moving averages of 116.30 and 114.48 cents, respectively.
Tuesday morning’s choice wholesale beef price was up 24 cents per cwt from Friday to $203.57. Select cuts were $1.79 higher at $194.63, the USDA said.
“The beef side won the weekend on Christmas and New Year’s. But funds took profits and liquidated long positions,” said Zuzolo.
Cattle market investors also exercised caution while awaiting the sale of about 5,700 animals at Wednesday’s Fed Cattle Exchange, which could dictate this week’s cash price direction elsewhere in the U.S. Plains.
Last week, slaughter-ready, or cash, cattle in the Plains traded at mostly $118 per cwt, up as much as $4 from a week earlier.
Fund selling and lower CME live cattle futures undercut the exchange’s feeder cattle contracts.
January feeders closed down 0.250 cent per pound to 130.200 cents.
