Chicago | Reuters — Chicago Mercantile Exchange lean hog futures closed mixed on Thursday, with the front August contract gaining against back months as a heat wave in the Midwest and Plains helped support nearby cash hog prices, traders said.
CME August lean hog futures settled up 1.425 cents at 116.3 cents/lb. while most-active October hogs ended down 0.25 cent at 95.775 cents — an unusually wide price spread between the two contracts (all figures US$).
“It’s a function of the heat that has made transportation of hogs more challenging for some producers, and maybe led to near-term tightness in the supply of slaughter-ready hogs. That has forced packers to put more money on the table,” said Dan Norcini, an independent livestock trader.
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The CME Lean Hog Index, a two-day weighted average of cash hog prices, rose to $116.37 per hundredweight (cwt), its highest since June 2021.
Wholesale pork prices backed off from 11-month highs set this week. The U.S. Department of Agriculture quoted the U.S. pork carcass cutout value at $123.90/cwt on Thursday afternoon, off 47 cents from a day earlier and down from Tuesday’s $125.12, the highest since Aug. 13, 2021.
On the cattle side, CME live cattle futures drifted lower on softer cash values. Market-ready cattle traded in Kansas and Texas at $136/cwt, down $1 from the bulk of last week’s trade in those areas, brokers said.
CME August live cattle futures settled down 0.025 at 135.725 cents/lb. and most-active October ended down 0.35 cent at 140.975 cents.
But CME feeder cattle futures closed higher, buoyed by a setback in corn futures that signaled cheaper feed costs. CME August feeder cattle futures rose 0.45 cent to finish at 178.275 cents/lb.
Traders await Friday’s monthly USDA Cattle on Feed report. Analysts surveyed by Reuters on average expect the government to report the number of cattle placed in feedlots during June at 1.586 million head, down five per cent from a year earlier.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago.
