Chicago | Reuters – Lean hog futures rallied at the Chicago Mercantile Exchange on Friday after falling earlier to contract lows under pressure from increased U.S. production.
Cattle futures also climbed.
A rise in wholesale prices for U.S. pork helped trigger the turnaround in hogs, analysts said. The U.S. Department of Agriculture priced the pork carcass cutout at $101.35 per hundredweight (cwt), up $4.33 from Thursday. Pork bellies climbed by $16.58, after a volatile week of trading.
“We hit the contract lows and rallied into the close,” said Austin Schroeder, analyst at Brugler Marketing & Management.
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CME July hogs LHN24 closed 0.875 cent higher at 93.650 cents per pound after sinking earlier to 90.4 cents, the lowest level since Jan. 4. The contract ended about 0.2 per cent higher for the week, after falling for the previous seven weeks.
Deferred futures, including the August, October and December contracts, set contract lows.
Ample U.S. supplies and technical selling weighed on prices before the market rallied, analysts said. Meatpackers have slaughtered about one per cent more hogs so far this year than last year and farmers are raising hogs to heavier weights, according to U.S. government data.
In CME’s cattle markets, futures surged on strong cash prices, traders said. Cash cattle on Thursday traded at about $186 per cwt in the south, up about $1 from last week, and around $193-$194 per cwt in the north, up about $3-$4 from last week, they said.
Boxed beef prices also jumped, with choice cuts priced at $319.89 per cwt, up $1.58 from Thursday, and select cuts up $4.56 at $303.81 per cwt, according to USDA.
“Cash is king at the moment on the cattle,” Schroeder said.
CME August live cattle LCQ24 settled up 3.675 cents at 183.175 cents per pound and reached its highest level since March 21. The contract gained about 3.4 per cent for the week.
CME August feeder cattle FCQ24 soared 4.5 cents to end at 261.975 cents per pound and were up about 2.8 per cent for the week.
