Chicago | Reuters –– Chicago Mercantile Exchange lean hogs drifted to a two-year low for a third straight session on Thursday, pressured by the steep drop in cash and wholesale pork prices, traders said.
February closed 0.75 cent per pound lower at 71.6 cents, and April fell 1.35 cents, to 72.875 cents (all figures US$).
Thursday morning’s average price of slaughter or cash hogs in Iowa/Minnesota slumped $2.66 per hundredweight (cwt) from Wednesday to $68.42, according to the U.S. Department of Agriculture.
Separate USDA data showed the morning’s wholesale pork price had fallen $2.48 from Wednesday to $84.56/cwt.
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Packers have enough supplies to accommodate Saturday’s estimated 180,000-plus head kill to make up for some U.S. plants that were closed for Monday’s Martin Luther King Jr. Day holiday, an analyst said.
Retailers are buying small amounts of pork due to ample supplies, he said.
Market bulls still cling to the prospect of a seasonal turnaround in cash prices, which briefly stirred early-session buying.
Thursday afternoon’s USDA cold storage report showed December pork stocks at 497.1 million lbs., up two per cent from November, but down 10 per cent from a year ago.
Weak live cattle close
CME live cattle futures posted modest losses on positioning before USDA’s monthly cattle report on Friday, traders said.
Analysts expected Friday’s report to show fewer cattle were placed in feedlots in December.
February live cattle closed 0.35 cent/lb. lower at 153.35 cents, and April was down 0.075 cent at 151.8 cents.
Weaker slaughter or cash cattle prices and soft wholesale beef demand wiped out initial futures gains.
Cash cattle in Kansas and Nebraska sold at $158 to $160/cwt, down from mostly $162 to $164.50 last week, feedlot sources said.
Investors are eying wintry weather in the Texas Panhandle which might support cash prices in the region.
The morning’s choice wholesale beef price fell $1.28/cwt from Wednesday to $255.91. Select rose 71 cents to $249.12, USDA said.
Futures weighed on cash prices while grocers balked at near-record high beef costs, a trader said.
The government put last month’s cold storage beef inventory at 441.2 million lbs., up 11 per cent from November and up marginally from the previous year.
CME feeder cattle finished higher on short covering, weak corn prices and deferred-month live cattle futures buying.
January closed up 0.275 cent/lb. to 215.975 cents and March ended at 206.325 cents, up 1.025 cents.
— Theopolis Waters reports on livestock futures markets for Reuters from Chicago.
