By Theopolis Waters
CHICAGO, Feb 26 (Reuters) – Chicago Mercantile Exchange lean hogs fell on Thursday for the first time in seven days, pressured by profit-taking on the eve of February’s final trading day, traders said.
April futures closed 2.175 cents per pound lower at 67.150 cents, with May down 2.600 cents at 79.300 cents.
Some investors were concerned that packers would slash bids for market-ready or cash hogs.
Packers’ margins are lower because of the rally in hog prices and falling wholesale pork values.
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Icy roads and cold temperatures across most of the U.S. disrupted livestock production, which fueled the recent cash price rally.
But harsh wintry weather in the northeastern United States, and the backlog of pork that resulted from the recently resolved West Coast dock dispute, constricted meat sales.
Thursday morning’s average cash hog price in Iowa/Minnesota was up 56 cents per hundredweight (cwt) from Wednesday to $66.60, the U.S. Department of Agriculture said.
USDA data showed the morning’s wholesale pork price at $67.89 per cwt, $1.58 lower than on Wednesday.
CATTLE UP THIRD STRAIGHT SESSION
Short-covering and anticipation of steady cash prices for this week supported CME live cattle contracts for a third day in a row, traders said.
For the most part, cash bids stand at $157 per cwt while sellers have dug in at $162, feedlot sources said. Reuters could not confirm rumors that packers in Nebraska hiked cash bids to $159 from $157.
Earlier this week, a few cattle in the U.S. Plains moved at $156 to $157 per cwt, down from $158 to $160 last week.
The morning’s Choice wholesale beef price gained $1.03 per cwt to $247.52 per cwt. in light volume from Wednesday. Select cuts were up 0.25 cents to $245.18, based on USDA data.
Small beef volume sales suggest packers are having difficulty moving beef at current prices, said Archer Financial Services broker Dennis Smith.
With the February contract set to expire on Friday, investors zeroed in on April’s huge discount to last week’s cash prices.
April and June upward momentum accelerated after piercing their respective 10-day moving average of 149.70 cents and 142.60 cents.
February ended 2.775 cents per lb. higher at 161.125 cents, and April up 2.950 cents to 149.800 cents.
CME feeder cattle jumped on technical buying and live cattle futures gains.
March closed 3.325 cents per lb. higher at 200.300 cents.
