Chicago | Reuters — Benchmark July lean hog futures on the Chicago Mercantile Exchange jumped nearly five per cent on Wednesday, extending their two-day rally to 11 per cent on a round of bargain-buying following a months-long slump, traders said.
CME July hogs settled up 3.8 cents at 83.325 cents/lb., while front-month June hogs ended up 1.75 cents at 82.575 cents/lb. (all figures US$).
The hog market has been under pressure for most of 2023, anchored by excessive hog supplies and weak demand for pork from exporters and U.S. consumers.
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July hogs had plunged to a life-of-contract low of 74.025 cents on Friday, while regulatory data showed that managed commodity funds held a near-record large net short position in lean hog futures as of May 23, leaving the market primed for a short-covering bounce.
“We’re probably seeing a lot of short-covering, especially around month-end,” said Austin Schroeder, a commodity analyst with Nebraska-based Brugler Marketing.
Firming wholesale pork prices lent support. The U.S. Department of Agriculture priced carcasses late Wednesday at $85.27 per hundredweight (cwt), up $1.59 from Tuesday and the highest since mid-March.
Cattle futures rose as well, setting life-of-contract highs as tightening U.S. cattle supplies and rising beef prices continued to buoy the market.
CME August live cattle settled up 0.5 cent on Wednesday at 167.675 cents/lb. after setting a contract high at 167.75. August feeder cattle rose 1.4 cents to settle at 239.175 cents/lb. after posting a contract high at 239.85 cents.
In the beef market, USDA priced choice cuts at $305.84/cwt, up 88 cents from Tuesday, while prices for select cuts fell 62 cents at $287.15/cwt.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago.
