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Published April 30, 2015, 02:47 PM

CME hogs end up 6th straight day as cash prices surge

CHICAGO - Chicago Mercantile Exchange lean hogs gained for a sixth straight day on Thursday with tight supplies boosting cash hog and wholesale pork values, traders said.

By: Theopolis Waters, Reuters

CHICAGO - Chicago Mercantile Exchange lean hogs gained for a sixth straight day on Thursday with tight supplies boosting cash hog and wholesale pork values, traders said.

May closed 1.625 cents per lb higher at 76.950 cents, and June ended up 0.225 cent to 81.425 cents.

The morning's average market-ready, or cash, hog price in Iowa/Minnesota leaped $3.52 per hundredweight (cwt) from Wednesday to $74.74, the U.S. Department of Agriculture (USDA) said.

Separate USDA data showed the morning's wholesale pork price, or cutout, climbed $1.72 per cwt from Wednesday to $73.06.

Fewer hogs are available after farmers a few weeks ago rushed them to market to avoid falling prices at that time, said traders and analysts.

To salvage their fallen margins, packers raised the cost of pork at wholesale at a time when grocers are buying product for grilling and Mother's Day specials, they said.

"I look for the cutout to continue to sneak up, with retailers maybe getting the hint that pork is probably as cheap as it's going to be for a while," a Midwest hog dealer said.

LIVE CATTLE SLUMP

CME live cattle finished lower, pressured by fund liquidation and weaker wholesale beef prices, traders said.

April, which expired at noon CDT (1700 GMT), settled 1.300 cents per lb lower at 159.500 cents, and June down 1.200 cents to 149.700 cents.

Wednesday morning's choice wholesale beef price was at $257.66 per hundredweight (cwt), down 89 cents from Monday. Select cuts slumped $1.21 to $244.85, the USDA said.

Grocers are buying high-priced beef hand-to-mouth given readily available cheaper pork and chicken.

Despite futures' steep bullish discounts to last week's market-ready or cash prices, investors cautiously awaited this week's cash sales.

Cash bids in Kansas were $156 to $158 per cwt, and $157 in Texas, with feedlots in both states pricing cattle at $161 to $163, industry sources said. A week ago, U.S. Plains cash cattle fetched $157 to $160.50.

Profitable margins may prod some processors to spend the same as last week for supplies, traders said.

But, current futures prices and anemic beef demand are bearish cash price influences, they said.

CME feeder cattle April, which also expired at noon CDT (1700 GMT), settled 1.025 cents per lb higher at 217.550 cents. It nearly matched the exchange's latest feeder cattle index at 217.37 cents.

Remaining feeder cattle months closed flat to weak on profit-taking and spillover live cattle market pressure.

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