Saturday, October 23

CME hog futures surge on bullish USDA data; cattle futures sag


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CHICAGO — Chicago Mercantile Exchange (CME) lean hog futures soared on Monday, with the most-active December contract rising its daily limit after a quarterly US Department of Agriculture report showed a smaller-than-expected US hog herd.

CME October lean hogs settled up 2.975 cents at 90.250 cents per lb, and the December contract rose its daily maximum of 4.750 cents to finish at 81.550 cents per lb. Limits will expand to 7 cents for Tuesday’s session, the exchange said.

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Hog futures roared higher after the USDA late Friday said the US Sept. 1 hog inventory was down 4% from a year ago and the number of hogs kept for breeding was down 2%, both below trade expectations.

In particular, analysts noted that the June-to-August pig crop was down 6% from last summer.

“That tells you (hog) supplies are going to stay tight into the end of the year. The first time you have a chance to build supplies back is next summer,” said Don Roose, president of Iowa-based US Commodities.

Higher wholesale pork prices and a significant discount of futures to cash hog prices lent support. The pork carcass cutout was up $1.18 on Monday at $111.95 per cwt, the highest since Aug. 27, according to the USDA.

On the cattle side, futures fell after the USDA’s monthly cattle-on-feed report, also released on Friday, showed Sept. 1 on-feed supplies and August placements above trade estimates.

October live cattle settled down 0.525 cent on Monday at 122.400 cents per lb and benchmark December fell 0.350 cent to end at 127.8 cents.

November feeder cattle futures tumbled 3 cents to settle at 155.575 cents per lb.

(Reporting by Julie Ingwersen; Editing by Shinjini Ganguli)



financialpost.com

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