Lean hogs bounce on short-covering - CME

Cattle futures rise
calendar icon 1 June 2023
clock icon 2 minute read

Benchmark July lean hog futures on the Chicago Mercantile Exchange (CME) jumped nearly 5% on Wednesday, extending their two-day rally to 11% on a round of bargain-buying following a months-long slump, Reuters reported, citing traders.

CME July hogs settled up 3.800 cents at 83.325 cents per pound, while front-month June hogs ended up 1.750 cents at 82.575 cents per pound.

The hog market has been under pressure for most of 2023, anchored by excessive hog supplies and weak demand for pork from exporters and US consumers.

July hogs had plunged to a life-of-contract low of 74.025 cents on Friday, while regulatory data showed that managed commodity funds held a near-record large net short position in lean hog futures as of May 23, leaving the market primed for a short-covering bounce.

"We're probably seeing a lot of short-covering, especially around month-end," said Austin Schroeder, a commodity analyst with Nebraska-based Brugler Marketing.

Firming wholesale pork prices lent support. The US Department of Agriculture priced carcasses late Wednesday at $85.27 per hundredweight (cwt), up $1.59 from Tuesday and the highest since mid-March.

Cattle futures rose as well, setting life-of-contract highs as tightening US cattle supplies and rising beef prices continued to buoy the market.

CME August live cattle settled up 0.5 cent on Wednesday at 167.675 cents per pound after setting a contract high at 167.750. August feeder cattle rose 1.4 cents to settle at 239.175 cents per pound after posting a contract high at 239.850 cents.

In the beef market, the USDA priced choice cuts at $305.84 per cwt, up 88 cents from Tuesday, while prices for select cuts fell 62 cents at $287.15 per cwt.

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