By Theopolis Waters
CHICAGO, March 28 (Reuters) – Chicago Mercantile Exchange lean hogs on Tuesday slumped to their lowest level in two months, as cash and wholesale pork values dropped on abundant supplies, said traders.
They said sell stops and fund liquidation accelerated market declines.
April hogs ended 0.550 cent per pound lower at 65.100 cents, and below the 200-day moving average of 65.543 cents.
May finished 0.925 cents lower at 69.400 cents.
The retreat in the futures may suggest slowing U.S. pork exports and possibly too many hogs for this period, said Rosenthal Collins broker James Burns.
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USDA data released early Tuesday showed the average wholesale pork price fell $1.18 per cwt from Monday to $77.94, primarily due to $6.42 lower pork belly prices.
Investors await Thursday’s U.S. government quarterly hog report that analysts expect to show continued herd expansion.
MOST CATTLE FUTURES GAIN
CME live cattle contracts settled mostly firmer after investors sold April futures and simultaneously bought deferred months in a trading strategy known as bear spreading.
This week’s cash price uncertainty deterred April futures buyers. April live cattle closed down 0.300 cent per pound at 120.775 cents.
June ended up 0.150 cent at 111.600 cents and August 0.350 cent rose to 107.125 cents.
Market bulls said cash prices were supported by Tuesday’s firmer wholesale beef prices, tight supplies in parts of the U.S. Plains and fewer cattle for sale than last week.
Contrarians point to current futures prices, slipping packer profits and substantial numbers of cattle available that are contracted against the futures market.
Traders will take their cue from Wednesday morning’s Fed Cattle Exchange sale of about 3,900 animals.
Last week, cattle there on average sold for $133.35 per cwt. A week ago most slaughter-ready, or cash, cattle in the U.S. Plains traded from $130 to $134.50 per cwt.
Tuesday morning’s average wholesale Choice beef price was up 29 cents per cwt from Monday at $220.20. Select rose 80 cents to $214.42, the USDA said.
CME feeder cattle mirrored mostly firmer live cattle contracts. March feeder cattle, which will expire on Thursday, ended up 0.200 cent per pound to 132.350 cents.
Most actively traded April was down 0.150 cent at 132.950 cents. May ended 0.275 cent higher at 131.600 cents.
