U.S. livestock: CME hogs down again as supply worries persist

Chicago | Reuters –– Chicago Mercantile Exchange lean hogs extended losses into a fourth straight session on Monday as hefty supplies stifled cash and wholesale pork prices, traders said.

Spot-August futures closed down 0.675 cent/lb. at 76.65 cents, and most-active October closed 1.15 cents lower at 62.975 (all figures US$).

On Monday, packers processed 426,000 hogs, 53,000 more than last Monday when some plants were closed for an annual floater holiday, based on U.S. Department of Agriculture estimates.

Market-ready (cash) hogs in the Midwest Monday morning traded steady to $1/cwt lower than on Friday, according to regional hog dealers.

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The morning’s wholesale pork value (cutout) was at $89.35/cwt, down 82 cents from Friday with all categories priced lower except ham, USDA said.

“October futures trading at about 63 cents is enough incentive for farmers to keep hogs moving,” a trader said.

Grocers are not having problems finding enough product for Labor Day holiday grilling demand, he said.

Cattle up, but off morning highs

CME live cattle retained some of their initial gains driven by Friday’s strong cash and wholesale beef prices, but eased from session tops while awaiting this week’s cash sales, traders said.

Spot-August futures closed 0.675 cent/lb. higher at 150.25 cents, and October up 0.775 cent at 149.3 cents.

A week ago, cash cattle in the U.S. Plains sold at mostly $150 to $152/cwt, as much as $5 higher than the week before, feedlot sources said.

Monday morning’s wholesale choice beef price had climbed $1.41/cwt from Friday to $237.75/cwt. Select cuts rose $1.05, to $231.19, USDA said.

“I think the psychology is not strong enough to take (futures) up hard. It’s just a grinder,” said David Hales, author of the Hales Cattle Letter.

A supply increase is a few months away, countered by the industry currently experiencing some of their tightest numbers in history, he said.

The government on Monday estimated that at 107,000 head of cattle, packers processed 6,000 fewer than last year.

Next month, beef may find its way into meat cases of supermarkets that might feature less pork until National Pork Month in October, an analyst said.

CME feeder cattle were supported by live cattle futures advances, but pressured by sharply higher corn prices.

August finished up 0.125 cent/lb. to 214.25 cents, and September down 0.2 cent, to 210.375 cents.

Theopolis Waters reports on livestock markets for Reuters from Chicago.

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