Lean hog futures bounce after five-session slide - CME
Cattle futures end higher
12 September 2024
2 minute read
By: Chicago Mercantile Exchange (CME) lean hog futures closed higher on Wednesday for the first time in six sessions, supported by bargain buying and relative strength in cash hog prices, Reuters reported, citing brokers.
CME October hog futures settled up 1.200 cents at 79.750 cents per pound.
Cash hog values have been declining in recent weeks but remain higher than futures prices, a supportive factor for futures. The CME's Lean Hog Index, a two-day weighted average of cash prices, fell to 85.56 cents per pound, its lowest reading since early April, but still above October futures, which have traded below 80 cents for most of this week.
"People don't want to be short when (futures) are discounted to the cash. (They) start thinking it's a good buy," said Doug Houghton, analyst at Brock Associates.
However, plentiful pork supplies continue to hang over the hog market, capping rallies. The US Department of Agriculture (USDA) priced pork carcasses on Wednesday afternoon at $92.91 per hundredweight (cwt), down $1.89 from Tuesday.
"Hog slaughter is still running above a year ago, and pork production is (also) because hog weights are still running heavier than a year ago. So the fundamental situation does not look particularly strong," Houghton said.
Live cattle futures ended higher in technical trade, buoyed by strength in feeder cattle futures.
CME October live cattle futures settled up 0.625 cent at 176.950 cents per pound, and October feeders ended up 2.100 cents at 237.500 cents per pound after reaching 238.025 cents, the contract's highest in a week.
Wholesale beef prices ticked lower. The USDA priced choice cuts of beef on Wednesday afternoon at $307.36 per cwt, down 87 cents from Tuesday.
Market players await monthly supply/demand reports due from the USDA on Thursday that will include updated estimates of US 2024 production of corn and soybeans as well as beef, pork and poultry.
