CME lean hog futures climb on firm cash; cattle end lower

Benchmark June lean hog futures on the Chicago Mercantile Exchange rose on Monday, setting a life-of-contract high on firm cash hog prices and expectations of tightening supplies.

CME June hogs settled up 0.200 cent at 126.050 cents per pound, paring gains after reaching a contract top of 126.875 cents. The nearby April and May contracts also closed higher, but deferred contracts ended lower.

The CME’s lean hog index, a two-day weighted average of cash hog prices, rose to 102.250 cents per pound, its highest since Aug. 31. But wholesale pork values fell. The U.S. Department of Agriculture (USDA) quoted the U.S. pork cutout at $107.41 per hundredweight (cwt) on Monday afternoon, down $2.49 from Friday, led by declining ham prices.

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Ahead of the USDA’s quarterly Hogs and Pigs report on Wednesday, analysts surveyed by Reuters on average expected the government to show that the U.S. hog herd was 1.2% smaller as of March 1 compared to a year earlier.


Meanwhile, Chinese pork processing giant WH Group Ltd said its 2021 profits rose 7.2% to $1.043 billion on higher sales in the United States and Europe. Revenue at the group, which owns U.S.-based Smithfield Foods, the world’s largest pork processor, grew 6.7% to $27.29 billion.

In cattle futures, CME June live cattle settled down 0.600 cent at 136.775 cents per pound after the USDA on Friday reported the number of cattle on feed as of March 1 at 12.163 million head, 101.4% of the year-ago total and the highest March 1 inventory in records dating to 1996. Analysts had expected the report to show the figure at 101.1% of a year ago.

Placements during February were 109% of February 2021, topping market forecasts for 106.1%, and marketings were 105% of the year-ago total, also above trade forecasts for 104.2% of the year-ago total.

CME May feeder cattle futures fell 0.250 cent to end at 165.075 cents per pound.