Chicago | Reuters — Chicago Mercantile Exchange lean hog futures climbed to a five-week high on Tuesday, bolstered by technical buying and gains in prices for cash hogs and pork, traders said.
Live cattle futures were lower, easing on chart-based selling. Feeder cattle were higher, supported in part by lower corn prices as trading resumed following Monday’s U.S. Memorial Day holiday.
The holiday weekend is the unofficial beginning of the summer grilling season and traders were looking for clues on meat demand, including whether retailers were actively buying pork and beef to restock stores.
Lean hogs opened sharply higher but came off their early peaks, still extending the rally to the fourth straight session. Most-active CME July hogs were up 1.3 cents, to 78.85 cents (all figures US$).
The U.S. Department of Agriculture on Tuesday morning said wholesale pork prices were up $2.52, at $78.12/cwt, but the agency after the close of trading said values were up on 74 cents at $76.34.
Hogs in the Iowa and Minnesota cash market were up 79 cents at $66.09/cwt.
Some of the earlier buying was linked to the morning reports, said independent livestock trader Dan Norcini, who added that warm weekend weather in the U.S. was conducive to outdoor cooking and meat demand.
“The weather was pretty good all over the country… and the morning cutout price was really good,” Norcini said.
By contrast, wholesale beef prices late on Tuesday were up only 13 cents at $227.56/cwt for choice-grade and down 97 cents at $203.65/cwt for select grade, USDA data showed, suggesting relatively tepid retailer demand to begin the week.
CME June live cattle were 1.525 cents lower at 103.125 cents/lb. and most-active August cattle was down 0.85 cent at 101.45 cents/lb.
CME August feeder cattle were up 0.05 cent at 144.975 cents, firming as corn prices fell about 1.5 per cent. Lower prices for corn, the most widely consumed cattle feed, can lower costs and boost demand for cattle to bring into feedlots for fattening.
A USDA report on Friday showed a steep drop of cattle placed on feed in April, which also supported feeder prices.
Commodity Futures Trading Commission data on Friday showed speculative investors reducing net long positions in live cattle — activity that may have continued on Tuesday.
“There may have been some residual longs in the June (cattle) contract and they are dumping them,” Norcini said.
— Michael Hirtzer reports on commodity markets for Reuters from Chicago.