By Theopolis Waters
CHICAGO, Feb 27 (Reuters) – The lead Chicago Mercantile Exchange hogs contract surged nearly three percent on Thursday, sparked by news of the pending return of U.S. pork exports to Russia, traders said.
Russia plans to resume pork imports from the United States around March 10, Russia’s veterinary and phytosanitary service said on Thursday.
The upswing in wholesale pork values and short-covering contributed to the April contract’s climb to the 3.000-cent per pound daily price limit, traders said.
U.S. Department of Agriculture data showed the price of pork at wholesale on Thursday morning at $102.94 per hundredweight (cwt), $2.34 higher than on Wednesday.
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Hog futures drew more support from expectations of consumers switching from expensive beef to less costly pork.
“Elevated beef prices set an environment where hogs had room to climb, simply as being the other white meat or an alternative,” said Citigroup futures specialist Sterling Smith.
“The returning of U.S. pork exports to Russia was the catalyst, too, that pushed futures higher,” said Smith.
Buying in anticipation of reduced supplies amid the outbreak of Porcine Epidemic Diarrhea virus (PEDv), which is deadly to baby pigs, on U.S. farms sent deferred hog contracts to new highs.
April hogs settled at 103.850 cents per lb, up 2.825 cents, after posting a new contract high of 104.025 cents in electronic trading.
June finished at 109.925 cents, 1.575 cents higher, and hit a new contract high of 109.950 cents.
MOST LIVE CATTLE SLIP ON PROFIT TAKING
CME live cattle futures turned mostly lower, pressured by profit-taking after setting new highs fueled by record-high cash prices and solid beef demand, traders said.
So far this week, cash cattle in Texas and Kansas fetched $150 per cwt, besting the previous record of $146 to $147 in January, feedlot sources said.
Cash cattle in Nebraska traded at $152, topping last month’s $150 record, they said.
Thursday morning’s wholesale choice beef price, or cutout, rose $1.35 per cwt. from Wednesday to $220.30. Select cuts were up $1.66 to $218.33, based on USDA data.
Packers spent more for cattle, led by futures’ rally this week and the improved beef cutout, a trader said.
February futures, which will expire on Friday, retained most of their gains after factoring in this week’s cash cattle prices.
February live cattle closed 1.400 cents per lb higher at 150.050 cents, and peaked at a fresh contract high of 150.950 cents.
April ended at 144.425 cents, down 0.075 cent after easing from a fresh contract high of 145.975 cents. And, June closed at 134.200 cents, 0.175 cent lower and marked a new contract high of 135.125 cents.
CME feeder cattle, for a lead contract, followed live cattle future to a new high before bowing to profit-taking.
March ended down 0.175 cent per lb at 171.825 cents, and April closed at 173.400 cents.
