7 February 2022

2 minute read

North America

Chicago Mercantile Exchange (CME) lean hog futures rose on Friday as tight hog supplies and strong demand fuelled gains for the fifth time in six sessions, reported Reuters.

The market shrugged off negative technical signals following a lower close in actively traded April futures on Thursday after posting a contract high during the session.

The benchmark contract has rallied nearly 20% in the past four weeks amid tightening supplies and solid domestic and export demand.

"The hog numbers are tight, we believe they are going to stay tight and the demand is going to stay strong all the way into the summer," said Don Roose, president of US Commodities in West Des Moines, Iowa.

CME April lean hogs settled 1.700 cents higher at 100.075 cents per pound, near the high for the day. Several deferred-month contracts posted contract highs.

Reduced hog slaughter rates this week following a severe winter storm in production areas across the Midwest, and some packing plant staffing problems due to coronavirus infections, were likely to underpin pork prices, traders said.

The US Department of Agriculture (USDA) estimated last week's hog slaughter, through Friday, at 2.233 million head, down from 2.332 million last week and 2.391 million a year ago.

Live cattle futures ended mostly higher, underpinned by higher cash market prices and solid packer demand amid increased slaughter rates.

Cattle at southern Plains feedlots traded $1 to $3 per cwt higher this week at $138 to $140 per cwt.

The cattle slaughter through Friday was estimated at 593,000 head, up from 586,000 a week ago and 584,000 a year ago, according to the USDA.

CME April live cattle ended up 0.125 cent at 146.875 cents per pound. March feeder cattle fell 0.625 cent to 166.100 cents per pound after reaching a two-month peak for a spot contract on Thursday.

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