CHICAGO, Sept 14 (Reuters) – Chicago Mercantile Exchange lean hogs on Wednesday sank to a 10-month bottom, and forged new contract lows, as abundant heavier animals continued to drag down cash prices, traders said.
October closed 1.825 cents per pound lower at 54.925 cents and posted a fresh contract low of 54.700 cents. December ended down 1.450 cents to 49.100 cents and made a new low of 48.750 cents.
Wednesday morning’s average cash hog price in Iowa/Minnesota tumbled $2.48 per cwt from Tuesday to $58.08, the U.S. Department of Agriculture said.
Separate USDA data on Wednesday showed Iowa/Minnesota hog weights for the week ended Sep. 10 averaged 280.2 lbs, during the Labor Day holiday. That was up 3.4 pounds from the previous week and down 0.4 pound from a year ago.
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Processors this week are accepting delivery of some hogs that last week remained on farms because of the Labor Day holiday and a temporary plant closure due to fire.
More hogs are also beginning to arrive at packing plants as moderating temperatures cause them to grow faster.
“Hogs may have gained a few pounds after getting backed up on farms because of the holiday. But cooler weather is going to make them grow anyway,” an Ohio hog merchant said.
October futures bore the burnt of Wednesday’s selloff on the last of five days when some funds trading in CME’s livestock markets shifted or “rolled” October positions into deferred months. The process is done in conjunction with the Standard & Poor’s Goldman Sachs Commodity Index (S&PGSCI).
CME live cattle reversed Tuesday’s losses on short-covering and buying of futures that are now par with last week’s cash prices, said traders.
October live cattle ended 1.125 cents per pound higher at 105.800 cents, and December closed up 0.550 cent to 106.375 cents.
Last week packers paid $105 to $106 per cwt for market-ready, or cash, cattle in the U.S. Plains. This week sellers in Kansas and Texas priced cattle at $110 versus $104 bids from packers.
Investors looking for steady to better cash prices by Friday pointed to Wednesday morning’s gains in wholesale beef prices and extremely profitable packer margins.
Contrarians cited more of them for sale than last week with a seasonal increase in supplies looming.
Firmer corn prices and mostly weaker cash feeder cattle prices pressured CME feeder cattle. September ended 0.700 cent per pound lower at 132.675 cents.
