Lean hog futures climb, cattle end lower - CME
Futures rose on firm cash, expectations of tight supply
29 March 2022
2 minute read
By: Benchmark June lean hog futures on the Chicago Mercantile Exchange (CME) rose on Monday, setting a life-of-contract high on firm cash hog prices and expectations of tightening supplies, reported Reuters.
CME June hogs settled up 0.200 cent at 126.050 cents per pound, paring gains after reaching a contract top of 126.875 cents. The nearby April and May contracts also closed higher, but deferred contracts ended lower.
The CME's lean hog index, a two-day weighted average of cash hog prices, rose to 102.250 cents per pound, its highest since 31 August. But wholesale pork values fell. The US Department of Agriculture (USDA) quoted the US pork cutout at $107.41 per hundredweight (cwt) on Monday afternoon, down $2.49 from Friday, led by declining ham prices.
Ahead of the USDA's quarterly Hogs and Pigs report on Wednesday, analysts surveyed by Reuters on average expected the government to show that the US hog herd was 1.2% smaller as of 1 March compared to a year earlier.
Meanwhile, Chinese pork processing giant WH Group Ltd said its 2021 profits rose 7.2% to $1.043 billion on higher sales in the United States and Europe. Revenue at the group, which owns US-based Smithfield Foods, the world's largest pork processor, grew 6.7% to $27.29 billion.
In cattle futures, CME June live cattle settled down 0.600 cent at 136.775 cents per pound after the USDA on Friday reported the number of cattle on feed as of 1 March at 12.163 million head, 101.4% of the year-ago total and the highest 1 March inventory in records dating to 1996. Analysts had expected the report to show the figure at 101.1% of a year ago.
Placements during February were 109% of February 2021, topping market forecasts for 106.1%, and marketings were 105% of the year-ago total, also above trade forecasts for 104.2% of the year-ago total.
CME May feeder cattle futures fell 0.250 cent to end at 165.075 cents per pound.
