28 July 2022

2 minute read

North America

Chicago Mercantile Exchange (CME) lean hog futures climbed on Wednesday, after being lower for two days, supported by a strong cash market, as analysts watch for market-ready hog numbers to begin seasonally moving higher, reported Reuters.

"The cash hog strength is impressive," said Matthew Wiegand, Risk Management Consultant at FuturesOne.

CME's nearby August lean hog futures added 1.625 cents to 118.600 cents per lb, while the most-active October hogs gained 2.800 cents to 96.450 cents, its biggest daily gain since 6 July.

Strong consumer prices for pork have allowed pork packers to offer higher cash prices as they attempt to attract tight supplies of hogs, Wiegand said.

"We'll need to see fresh pork values start to slide faster and pull margins out to see if they back off cash," he added.

The CME Lean Hog Index, a two-day weighted average of cash hog prices, added 35 cents to $119.48 per cwt.

Meanwhile, CME live cattle futures eased slightly as cash trade earlier in the week ticked lower.

CME August live cattle futures inched 0.075 cents lower to 136.800 cents per lb, while the most-active October contract lost 0.050 cents to 142.325 cents.

Cash cattle traded $1.00 lower at $135.00 per hundredweight (cwt) in the US Southern Plains, the US Department of Agriculture said, while Northern Plains cattle traded steady between $139.00 and $143.50 per cwt.

Beef packers may take advantage of increased cattle marketings to increase cold storage, anticipating tighter slaughter volume in as the national herd contracts, Weigand noted.

"I think the anticipation of tighter numbers as we continue to see the effects of cattle liquidation, there’s going to be pretty good incentive to sock stuff away in cold storage and keep a retail buffer in there," he said.

Wholesale beef prices eased, with choice cuts trimming $1.12 to $267.99 per cwt, according to the USDA, while select cuts lost $2.07 to $241.81 per cwt.

CME feeder cattle futures firmed, with most-active September feeder cattle futures adding 1.425 cents to 181.850 cents per lb.

Source: Reuters