U.S. livestock: CME hogs up as processors seek market-ready supply

Chicago | Reuters — Chicago Mercantile Exchange lean hog futures gained on Tuesday, supported by cash prices as packers attempted to pull market-ready hogs forward to slaughter, analysts said.

“Packers are clearly chasing hogs. The supply of butcher hogs is not enough to meet demand,” said Dennis Smith, commodity broker at Archer Financial.

CME April lean hogs settled 2.525 cents higher at 103.8 cents/lb., while thinly-traded February hogs added 2.625 cents to 90.325 cents/lb. (all figures US$).

The national weighted-average price for purchased swine climbed $7.99/cwt, the U.S. Department of Agriculture said, while the CME’s Lean Hog Index a two-day weighted average of cash hog prices, firmed 1.57 cents to $85.87/cwt.

Processors slaughtered 481,000 hogs on Tuesday, remaining strong compared to last weeks diminished activity.

Meanwhile, nearby live cattle futures stepped back but remain elevated by strong consumer demand.

“Packer margins are still extremely profitable,” said Smith. “They have the financial incentive to process them and ship them, even though the beef is down.”

Boxed Beef prices were mixed, with choice cuts firming 29 cents to $279.25/cwt, while select cuts eased 21 cents to $274.83/cwt.

CME April live cattle ended down 0.225 cent at 146.175 cents/lb. March feeder cattle firmed 1.85 cents to 166.875 cents/lb., supported by weaker corn futures on the Chicago Board of Trade (CBOT).

Cash cattle trade was minimal across the U.S. Great Plains early in the week, though prices firmed last week to $138-$140/cwt.

Cattle slaughter improved, with processors slaughtering 122,000 head, up from a week ago and a year prior, USDA said.

— Christopher Walljasper reports on agriculture and ag commodities for Reuters from Chicago.