U.S. livestock: Cash prices propel CME hogs to one-year high

Chicago | Reuters — Chicago Mercantile Exchange lean hogs on Monday reached their highest level in almost a year as packers competed for supplies during the first full week of production after the New Year’s holiday, said traders.

The February contract led the charge after investors bought that trading month and simultaneously sold deferred contracts.

February hogs settled up 1.55 cents/lb. at 72.975 cents (all figures US$). April ended 0.725 cent higher at 76.8 cents.

More live cattle futures losses

CME live cattle lost ground for a third straight session following last week’s softer cash prices and the prospect of lower cash returns this week, said traders.

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Monday was the first of five days in which funds in CME’s livestock markets that follow the Standard + Poor’s Goldman Sachs Commodity Index “rolled” or sold February positions and simultaneously bought deferred months.

February live cattle finished 2.025 cents/lb. lower at 117.225 cents. April ended 1.55 cents lower at 119.3 cents.

The roll contributed to Monday’s declines but warmer weather in the Plains this week, which might result in more cattle coming to market, was a major factor behind the selloff, said Oak Investment Group president Joe Ocrant.

Last week’s winter storm on the East Coast may have hurt beef demand in the region, he added.

A week ago packers paid $121-$122/cwt for slaughter-ready, or cash, cattle moved at mostly $123 a week earlier.

The recent cold spell across much of the Plains and Midwest slowed weight gains in cattle and made it difficult to transport to packing plants.

Sell stops and live cattle futures losses pressured CME feeder cattle contracts.

January feeder cattle closed down 0.175 cent/lb., to 146.45 cents.

— Theopolis Waters reports on livestock markets for Reuters from Chicago.

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