By Theopolis Waters
CHICAGO, May 8 (Reuters) – Chicago Mercantile Exchange hog futures closed mixed on Thursday as funds sold, or rolled, the June contract and bought deferred months, traders said.
Meanwhile, tepid wholesale pork demand and lower prices for market-ready, or cash, hogs undercut nearby months, traders said.
Thursday morning’s hog price in the western Midwest slumped $3.61 per hundredweight (cwt) from Wednesday to $109.28, the U.S. Department of Agriculture said.
Separate USDA data showed the morning’s wholesale pork price dipped 11 cents per cwt from Wednesday to $111.86.
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“There’s no good news out there,” said James Burns, president of JBS Trading Co.
Investors look for hog and pork prices to trend higher as Memorial Day holiday grilling demand heats up.
The evening out of pre-weekend positions could also include some short-covering, traders said.
May hogs closed down 0.325 cent per lb at 114.900 and June ended 1.025 cents lower at 120.150.
July ended 0.400 cent higher at 123.425, and August up 0.150 cent at 121.850.
CATTLE UP ON DISCOUNTS
CME live cattle futures gained from their discount to steady to lower cash returns expectations this week, traders said.
Futures will remain undervalued even if prices for slaughter-ready, or cash, cattle are reported lower, a trader said.
Cash cattle bids in the southern Plains stood at $144 per cwt, feedlot sources said. Last week, cattle in Texas and Kansas sold at $146 per cwt, with sales of up to $150 in Nebraska.
Sluggish wholesale beef demand and packers cutting slaughter to conserve margins are seen pressuring fed cash prices.
The morning’s wholesale Choice beef price dropped 41 cents per cwt from Wednesday to $226.74. Select cuts slipped 22 cents to $213.04, based on USDA data.
Packers may resist spending more for supplies in the face of a seasonal surge in cattle numbers.
Traders are realizing the cash market is on thin ice, said R.J. O’Brien floor manager Jim Brooks.
June ended at 137.925 cents, up 0.350 cent, and August up 0.200 cent at 137.600 cents.
Firm CME live cattle underpinned May feeder cattle futures, but profit-taking and firm corn prices sank remaining contracts.
May closed 0.475 cent per lb higher at 183.500 cents. August ended down 0.400 cent to 190.275 cents, and September 0.550 cent lower at 190.650.
