By Theopolis Waters
CHICAGO, July 5 (Reuters) – Chicago Mercantile Exchange hog futures rose on Friday after wholesale pork prices shrugged off pre-holiday losses ahead of U.S. Independence Day, analysts and traders.
CME hogs finished up 0.69 percent for the week.
Spot July hogs settled 0.725 cent per pound higher at 102.350 cents, and then marked a new contract high of 102.400 cents in after-hours trading.
Most-actively traded August closed up 0.900 cent at 97.750 cents.
The U.S. Department of Agriculture’s Friday morning mandatory wholesale pork price, or cutout, was $107.55 per hundredweight. The price was $1.35 higher than on Wednesday and its first increase since last Friday.
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Packers reduced pork prices enough to attract retailers looking to replenish meat cases after the holiday, a trader said.
Spread traders bought nearby CME hogs and sold deferred months as Chicago Board of Trade corn drifted lower. Cheaper corn may cause hog and cattle producers to feed more livestock and fatten them to higher weight.
Funds that trade CME live cattle and hogs sold August futures and bought deferred months. They moved long positions further out prior to similar moves next week by followers of the Goldman Sachs Commodity Index.
Funds that follow the index will shift their August long positions mainly into October. That shifting will be for five days starting July 8.
MIXED VOLATILE CATTLE TRADE
CME live cattle settled narrowly mixed in thin choppy action as some investors observed extended holiday vacations.
Live cattle futures ended the week 3.2 percent higher. It was their biggest weekly percentage gain since 7.1 percent for the week ending Sept. 7, 2012.
CME live cattle August closed unchanged at 121.950 cents. October ended at 126.250 cents, or up 0.025 cent and December settled down 0.150 cent at 128.100 cents.
“We just marked time while waiting for the rest of cash cattle to move,” a trader said.
Despite Wednesday’s lower cash returns, investors remained optimistic that unsold cattle would fetch prices comparable to last week.
On Wednesday, cash cattle in Texas and Kansas sold at $119 per cwt., down $1 from last week, feedlot sources said. Cash bids elsewhere in Texas and Nebraska stood at $119 against $121 to $122 asking prices, they said.
Packers need supplies for next week’s full production week after the holiday. But meat demand faces obstacles.
USDA’s Friday morning data showed the wholesale price of choice beef at $196.63 per cwt, $1.10 lower than Wednesday. Select cuts dropped 45 cents to $188.02.
Supermarkets are reluctant to book sizable beef orders until they determine how much product moved over the July 4 holiday.
And rising temperatures ahead in parts of the country could curb outdoor cutouts.
Lower corn prices pushed up CME feeder cattle.
Feeder cattle futures finished up 1.4 percent for the week, their third straight weekly gain.
August CME feeder cattle closed at 151.800 cents, or up 0.850 cent per lb. September finished 0.875 cent higher at 154.175 cents.
