By Meredith Davis
CHICAGO, June 4 (Reuters) – Chicago Mercantile Exchange lean hog contracts closed lower on Wednesday pressured by soft prices in the cash hog market.
Heavy carcass weight hogs also dragged on futures, traders said.
The font-month June contract traded at a premium to the CME lean hog index of 110.34, which also weighed. The CME June contract closed down nearly one percent to a three-month low.
The U.S. Department of Agriculture data showed the national average weighted hog prices at $107.70 per hundredweight (cwt) on Wednesday, 36 cents lower than the previous day.
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“Packers don’t seem to be in a hurry to bid up the cash market. And there are very heavy weight hogs, a lot of tonnage when you talk about the total amount of pork production,” said Dan Norcini, an independent livestock futures trader.
Early on Wednesday the USDA released Iowa-Minnesota average hog weights for the week ended May 31 at 286.7 pounds, unchanged from the previous week, but up 10 lb. from a year ago.
“The reduction in hog slaughter is not impacting the market like some predicted because of the heavy weights,” Norcini said.
June hogs, which expires mid-month, ended down 1.050 cent per lb. at 112.550 cents. July closed down 0.800 cents at 121.500.
CATTLE ENDS MIXED
Chicago Mercantile Exchange live cattle closed narrowly mixed on Wednesday as expectations of lower cash prices weighed while lighter slaughter volume lent some support, traders said.
There were some unconfirmed bids of $142 per cwt. for cash cattle in Texas, a trader said. Last week, cash cattle traded at $143 in the U.S. Plains.
“The lower bids are pressing the front-month, but slow slaughter is positive for futures. It is an indication of tight supplies and is keeping the August contract elevated,” said Domenic Varricchio, a commodities broker at Schwieterman, Inc.
USDA estimated week-to-date cattle slaughter at 348,000 head, 26,000 head less than in the same period last year.
Wednesday afternoon’s wholesale choice beef price fell 55 cents per cwt. from Tuesday to $232.11. Select cuts rose one cent to $223.86, according to U.S. Department of Agriculture data.
The June contract, which expires at the end of the month, ended at 138.000 cents, down 0.350 cent. August closed at 140.175 cents, up 0.100 cent.
Tight supplies, good pasture and weak corn prices supported CME feeder cattle, a trader said.
August ended at 198.775 cents, up 0.475 cent higher and September at 199.500 cents, up 0.725 cent.
