Lean hogs climb as traders eye seasonal supply shifts - CME

Live cattle markets dip
calendar icon 31 August 2023
clock icon 2 minute read

Chicago Mercantile Exchange (CME) lean hog futures climbed on Wednesday, finding support as traders gauged pork demand and watched for signs of a seasonal influx of market-ready hogs, reported Reuters.

"We still have an index that's higher than the October. It usually doesn't close the gap until we get into September a week or two," said Scott Varilek, broker at Kooima Kooima Varilek Trading Inc. "I think we've got some supply coming to the fourth quarter that's gonna give it a little negative tone."

The most-active October lean hog futures gained 2.875 cents to 83.600 cents per pound.

Wholesale pork carcass cutout eased 26 cents by midday to $92.59 per cwt.

Pork processors slaughtered 468,000 head, down 10,000 from the same period last year, the US Department of Agriculture said.

The CME's Lean Hog Index, a two-day weighted average of cash prices, last eased to 93.89 cents per pound.

Meanwhile, CME live cattle futures slipped lower, though fundamentals remain supportive, Varilek said.

"I'm still a little long term friendly, due to tight supplies. We have not seen heiffer retention yet," he said, referring to producers keeping heiffers from slaughter to breed more calves.

The most-active October live cattle dipped 1.425 cents to 180.050 cents per pound, while October feeder cattle fell 1.525 cents to 255.225 cents per pound.

Packers have not been aggressively courting producers for market-ready cattle, Varilek said, as the upcoming Labor Day holiday weekend will mean smaller slaughter numbers.

Beef packers slaughtered 125,000 head, down 2,000 head from the same period a year ago, the USDA said.

Boxed beef prices were mixed, with choice cuts gaining 75 cents to $315.11 per cwt., while select cuts fell 15 cents to $289.53 per cwt, the USDA said.

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