CHICAGO, Dec 7 (Reuters) – Chicago Mercantile Exchange lean hog futures gained for a third straight day on Wednesday, led by upward-trending cash and wholesale pork prices, said traders.
December hogs closed up 1.325 cents per pound at 54.700 cents. Most actively traded February ended 2.275 cents per pound higher at 59.750 cents.
Packers are content to pay more for hogs as long as their margins hold out and they are able to sell product, a Midwest hog merchant said.
He added that the some processors are having difficulty buying hogs that are not as plentiful as they were a few weeks ago when plummeting cash prices forced farmers to sell animals earlier than they would have.
Read Also
Carney says he will take part in bid to resolve China canola dispute
Prime Minister Mark Carney on Wednesday said he and other senior officials would work to resolve a dispute with China over tariffs that Beijing has imposed on canola.
Also, supplies have tightened as colder temperatures in parts of the Midwest slow down animal weight gains, regional hog merchants said.
Doug Houghton, an analyst with Brock Associates, said Wednesday’s U.S. Department of Agriculture pork export data for October suggests that strong exports may have underpinned pork prices during the fall.
Wednesday morning’s prices for slaughter-ready, or cash, hogs in Iowa/Minnesota averaged $48.65 per cwt – $1.38 higher than on Tuesday, the USDA said.
Separate government data showed the wholesale pork price on Wednesday morning jumped $1.09 per cwt from Tuesday to $75.60.
Weaker cash and wholesale beef prices pressured CME live cattle futures, traders said.
December live cattle closed 0.475 cent per pound lower at 109.375 cents, and February ended down 0.275 cent to 110.775 cents.
Adequate supplies, slimmer packer margins and tepid wholesale beef demand undercut early-week cash cattle prices, said traders and analysts.
Wednesday morning’s choice wholesale beef price fell 98 cents per cwt from Tuesday to $189.53. Select cuts were 93 cents lower at $172.30, the USDA said.
So far this week a small volume of cattle in the U.S. Plains moved at $112 per cwt, down from mostly $114 to $115 last week, said feedlot sources.
Animals at Wednesday morning’s Fed Cattle Exchange traded lightly at $109 to $112 per cwt. Cattle there a week ago fetched $111.50 to $113.25.
Packer bids for unsold cattle in the Plains stood at $110 to $112 per cwt versus asking prices as high as $116, feedlot sources said.
Technical support and firmer back-month live cattle futures underpinned CME feeder cattle contracts. January feeders ended up 0.125 per pound at 126.975 cents.
