By Meredith Davis
CHICAGO, June 6 (Reuters) – Chicago Mercantile Exchange lean hogs ended higher on Friday, supported by fund buying, anticipation of high cash prices and tight hog supplies, traders said.
Lean hog futures rose more than one percent on the day as consumer demand for grilling season grows even as pork and beef retail prices rise, said Dan Norcini, an independent livestock trader.
July lean hogs touched their three-cent trading limit, boosted by technical buying and expectations of increasing cash hog prices.
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“The cash hog market has stopped going down and the (pork) cutout has gone up. The seasonal rally may finally be kicking off, just a little bit later than usual,” said Norcini.
The U.S. Department of Agriculture data showed pork wholesale prices, or the cutout, at $119.59 per hundredweight (cwt.), up $1.38 from Thursday.
Less availability of market-ready hogs in the wake of the piglet-killing Porcine Epidemic Diarrhea virus has forced some packing plants to reduce slaughter volume.
USDA data showed estimated hog slaughter down 4.2 percent on a year-to-date basis compared with last year.
June hogs, which expire mid-month, ended up 1.42 percent or 1.600 cents per pound higher at 114.575 cents. July closed up 2.2 percent or 2.800 cents per lb at 124.975.
CATTLE ENDS MIXED
CME live cattle ended narrowly mixed on Friday. The front-month June contract was supported by expected higher prices in the cash cattle market.
Bids for cattle in the cash market were renewed at $142 per cwt in Texas. There was talk Kansas traded lightly on Thursday at $145 to $145.50 per cwt, which was about $2 higher than the previous week.
Lighter slaughter volume also lent support to live cattle futures, traders said.
USDA estimated year-to-date cattle slaughter at 6.3 percent lower than last year.
Weak wholesale beef prices dragged on the CME live cattle future values.
Friday morning’s wholesale choice beef price slipped $1.05 per cwt. from Thursday to $239.94. Select cuts fell 73 cents to $221.16, according to U.S. Department of Agriculture data.
June, which expires at the end of the month, ended at 140.125 cents per lb., up 0.625 cent. August closed at 141.300 cents, down 0.025 cent.
CME feeder cattle shrugged off pressure from rising U.S. corn futures. Chicago Board of Trade July corn rose more than two percent on Friday.
August feeder cattle ended at 200.525 cents per lb., up 0.700 cent, while the September contract closed up 0.625 cent at 200.875 cents per lb.
