CME update: US hog futures reach new highs on tight US supply
Lean hog futures on the Chicago Mercantile Exchange found life-of-contract highs for a second day on 26 March after the US Agriculture Department reported tight supplies in its quarterly hogs and pigs report after the close Thursday.
29 March 2021
3 minute read
By: Reuters reports that CME April lean hogs settled up 1.125 cents at 100.800 cents per pound, after reaching a contract high of 101.975 cents, while most-active June hogs closed 2.275 cents higher at 105.600 cents per pound after reaching 105.850 cents.
The USDA's quarterly report noted a 2% drop in the US herd as of 1 March, compared with a year earlier, well below analyst expectations.
"The front-end (futures) months led, up on tighter supplies going into late spring and summer," said Doug Houghton, technical analyst at Brock Capital Management. "Farrowing intentions were down – it only looks like tighter supplies ahead."
The USDA also projected a 4% drop in sows birthing new piglets from June to August, compared with a year earlier.
Tight hog supplies have boosted the cash market as well, traders said.
"Packers look like they are having to compete for hogs for the first time in a long while," said Dan Norcini, independent livestock trader. "The cash market continues to be very strong."
