By Theopolis Waters
CHICAGO, July 14 (Reuters) – Chicago Mercantile Exchange hog futures on Monday closed higher, supported by strong prices for cash hogs and wholesale pork values, traders said.
Monday morning’s average hog price in the Iowa/Minnesota market rose $2.58 per hundredweight (cwt) from Friday to $133.77, the U.S. Department of Agriculture said.
USDA’s data showed the morning’s wholesale pork price up 85 cents per cwt. to a record $136.18, said USDA.
Cash hog price gains and expectations for limited supplies, based on current slaughters, played roles in futures’ upswing, said Doane Advisory Services economist Dan Vaught.
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Packers on Monday processed 368,000 hogs, 19,000 fewer than last week and 31,000 less than a year ago, based on government data.
Fund buying developed after August and October broke through their respective 10-day moving average resistance levels of 130.37 cents and 115.21.
October led advances after fund investors in CME’s hog and live cattle markets liquidated their August long positions, and mainly bought back months. The procedure is known as the “roll” by followers of the Goldman Sachs Commodity Index.
July hogs, which will expire on Tuesday, closed up 0.575 cent per pound to 133.375 cents.
August ended up 1.675 cents to 130.350 cents, October 1.925 cents higher at 115.725 cents.
LOWER CATTLE SETTLEMENT
CME live cattle ended lower, pressured by soft wholesale beef values and expectations for steady to weaker prices for slaughter-ready or cash cattle, traders said.
Last week, cash cattle in the U.S. Plains traded at $155 to $156 per cwt.
Monday morning’s wholesale price for choice beef was up one penny from Friday to $251.80 per cwt. Select beef dropped 62 cents to $244.22, based on USDA data.
Investors are awaiting the delayed seasonal buildup in supplies. Also, beef demand typically suffers this time of year as hot weather curbs appetites for heavier meals.
However, cooler-than-usual summer weather might underpin near-term meat demand, said traders and analysts.
August live cattle finished 1.325 cents per lb. lower at 147.800 cents, and October fell 0.800 cents to 150.850 cents.
CME feeder cattle August drew support from the exchange’s cash feeder cattle index that jumped to 217.62 cents for July 11 from 214.58 for July 10.
Weak live cattle futures and firm corn prices pressured remaining feeder cattle months.
August closed up 0.300 cent per lb to 210.675 cents. September dropped 0.500 cent to 211.125 and October was 0.525 cent lower at 210.925.
