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Lean hog futures decline as cash values soften

27 November 2018

US lean hog futures fell on Monday on softer cash values and reduced demand for hogs from packers who were cutting kills, traders said

Chicago Mercantile Exchange lean hog futures fell despite strong packer margins. Some analysts said futures were correcting after the spot December contract closed above 59 cents per pound on Friday, topping the CME lean hog index near 58.

"You had a premium to cash. It's hard to maintain the December premium if the index is not going up," said Alan Brugler of Brugler Marketing.

The daily US hog slaughter for Monday fell to 452,000 head, the US Department of Agriculture said, the smallest since 12 November. The government revised Friday's total downward as well. The market shrugged off the idea that a winter storm over the weekend in the Plains and Midwest might slow the movement of hogs to packing plants.

"It's rough in the Midwest, but by midweek I think everything will open up and everything that needs to move, will move," one trader said. CME February lean hog futures settled down 2.275 cents at 65.550 cents per pound, retreating from a contract high set last week.

CME February live cattle futures settled down 0.275 cent at 120.650 cents per pound, a three-week high. January feeder cattle ended down 0.225 cent at 149.150 cents. Wall Street stock indexes were higher, adding some support to cattle futures on the bet that consumers spend more on pricier cuts of meat when financial markets strengthen.

Source: Reuters



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