By Theopolis Waters
CHICAGO, March 13 (Reuters) – Chicago Mercantile Exchange hog futures on Thursday hit a new high, with April closing up the three-cents limit, as prices for slaughter-ready hogs climbed fueled by tight supplies in part pegged to a deadly pig virus, traders said.
The Porcine Epidemic Diarrhea virus (PEDv), which is fatal to piglets has been spreading across U.S. hog farms. It has already reduced production in parts of the Midwest with the most severe impact expected this summer.
Two U.S. senators on Thursday requested the U.S. Department of Agriculture approve disaster relief for small hog farmers hurt by the virus.
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Thursday morning’s cash, or slaughter-ready, hog price in the closely-watched Iowa-Minnesota market was 89 cents per hundredweight higher than Wednesday at $113.55, according to the USDA.
On Thursday, packers processed 406,000 hogs, 12,000 fewer than last week and down 18,000 from a year ago, said USDA.
Separate USDA data showed the morning’s price of wholesale pork at $120.03 per cwt., down 57 cents from Wednesday’s record high.
April closed 3.000 cents per pound higher at 118.925 cents. June finished 2.275 cents higher at 127.600 per lb., after setting a new contract high of 127.950 cents.
MOST LIVE CATTLE UP AS FUNDS “ROLL”
CME live cattle settled mostly firm after funds rolled April positions into back months, traders said.
Funds in CME’s livestock markets sold their April long positions and bought deferred months in a process known as the “roll” by followers of the Goldman Sachs Commodity Index. Thursday was the last official day for the procedure.
Futures fluctuated throughout the session as investors adjusted positions while waiting for cash cattle to change hands.
Improved beef packer margins could lend support to cash cattle prices, a trader said. But the mixed, rather-than-higher, beef cutout price works against cash returns, he said.
Cash cattle bids in Texas and Kansas stood at $146 per cwt. with no response from sellers, feedlot sources said. Last week, cash cattle in Texas and Kansas moved at $148 per cwt. and $150 in Nebraska.
The morning’s wholesale choice beef price, or cutout, dropped 50 cents per cwt from Wednesday’s record high to $241.01. Select cuts set a new record after they jumped $1.04 to $237.80, based on USDA data.
Beef packer margins for Thursday were estimated at a positive $24.80 per head, compared with a positive $22.55 on Wednesday and a negative $31.50 a week ago, as calculated by HedgersEdge.com.
April live cattle closed down 0.250 cent per lb. at 143.625 cents. June finished at 136.875 cents, up 0.200 cent, and August ended up 0.150 cent at 134.775 cents.
CME feeder cattle took their cue from the mostly firm live cattle market.
March ended unchanged at 173.975 cents per lb. April closed up 0.050 cent at 175.925 cents, and May finished 0.225 cent higher at 177.000 cents.
