Cattle futures rally pauses - CME
Lean hog futures hit two-week high
14 January 2025
2 minute read
By: Chicago Mercantile Exchange (CME) lean hog futures climbed to a two-week high on Monday, supported by signs of bargain-buying in the wholesale pork market and a return of speculative buying, Reuters reported, citing traders.
CME February lean hogs settled up 0.625 cent at 83.175 cents per pound after reaching 83.800 cents, the contract's highest since Dec. 30. April hogs ended up 0.600 cent at 89.300 cents after hitting 90.100 cents, their highest point since Dec. 23.
In the pork market, the US Department of Agriculture (USDA) priced carcasses on Monday afternoon at $90.20 per hundredweight (cwt), down $1.16 from Friday, but still up from an 11-month low set a week ago at $87.83.
"Some of those cuts of pork, like the hams in particular, had gotten fairly cheap. I think that has enticed some buyers, some end-users, to come in," said Dan Norcini, an independent trader.
Total open interest in lean hog futures increased on Friday for the first time Dec. 27, CME Group data showed, as prices rose, an indication of speculative buying.
"It looks like you might have some funds entering the long side of the hog market," Norcini said.
Forecasts for frigid weather next week in the US Midwest and Plains lent support, potentially stressing animals and lowering weights, Norcini noted.
Cattle futures closed lower in a profit-taking setback after several contracts hit lifetime highs on Friday, driven by strong cash cattle prices and surging wholesale beef prices.
CME February live cattle futures ended down 1.375 cents on Monday at 197.400 cents per pound and April live cattle fell 1.275 cents to finish at 198.200 cents.
March feeder cattle settled down 1.500 cents at 267.900 cents per pound.
Speculators have been significant buyers of live cattle futures since September. Managed funds stretched their net long position in CME live cattle futures to 144,486 contracts in the latest week, the largest net long since April 2019, weekly commitments data from the US Commodity Futures Trading Commission showed on Monday afternoon.
The big net long leaves the market vulnerable to bouts of long liquidation.
"Traders are keeping an eye on that, in the event (that) fundamentals were to sour," Norcini said.
