By Theopolis Waters
CHICAGO, Sept 16 (Reuters) – Chicago Mercantile Exchange hogs on Monday spiked to new contract highs, driven by strong cash hog prices, traders and analysts said
The U.S. Department of Agriculture on Monday afternoon reported the average hog price in the most-watched Iowa/Minnesota market up $1.09 per hundredweight (cwt) from Friday at $96.48
CME October hogs finished 1.425 cents per lb higher at 92.125 cents and hit a new contract high of 92.225 cents in after-hours trading
December hogs settled at 88.475 cents, up 1.225 cents, and marked a new contract high of 88.500 cents
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Hog numbers declined last week for various reasons, which pushed up cash prices, U.S. Commodities analyst Don Roose said
Pork producers rushed hogs to market to take advantage of higher prices before the Labor Day holiday. Last week’s hot weather slowed hog weight gains, making them less available to packers
And hog producers downsized their herds during last summer’s historic drought in the Midwest that shot feed costs to record highs, resulting in fewer hogs now
But a seasonal bump in hog supplies, Monday’s pork price drop and unprofitable packer margins could soon pressure cash values, traders said
HedgersEdge.com estimated margins for U.S. pork packers on Monday were a negative $0.95 per head, compared with a negative $2.45 on Friday and a positive $4.65 a week ago
USDA data showed the wholesale pork price, or cutout, Monday afternoon at $96.71 per cwt, $1.45 lower than on Friday
SPREADS LIFT LIVE CATTLE
CME live cattle futures closed moderately higher on bullish spreads in anticipation of steady cash cattle prices this week, traders and analysts said
October closed 0.300 cent per lb higher at 125.550 cents per lb and December finished up 0.075 cent at 129.225 cents
Mixed wholesale beef quotes and the belief that cash cattle prices have bottomed out seasonally could underpin cash prices and support futures, traders said
No cash bids or asking prices were reported by feedlot sources. Cash cattle in the U.S. Plains last week traded at $123 per hundredweight (cwt), which was steady with the week before
USDA data Monday afternoon showed the wholesale choice beef price, or cutout, at $193.02 per cwt, up 33 cents from Friday. Select cuts were down 25 cents to $176.43
Flooding in northern Colorado forced the shutdown of JBS USA’S Greeley, Colorado, beef packing plant, company spokesman Cameron Bruett said. The facility, which processes about 5,000 head of cattle per day, will resume operations on Tuesday, he said
CME feeder cattle drew support from modest live cattle market gains and $3 to $5 per cwt higher cash feeder cattle prices local markets
September ended up 0.300 cent to 157.600 cents while October settled at 159.500 cents, 0.225 cent higher.
