CME hogs gain on short covering before USDA reportCHICAGO - Chicago Mercantile Exchange lean hog futures closed higher on Friday, supported by short covering before the U.S. Department of Agriculture's quarterly hog report expected at 2 p.m. CDT (1900 GMT), traders said.
By: Theopolis Waters, Reuters
CHICAGO - Chicago Mercantile Exchange lean hog futures closed higher on Friday, supported by short covering before the U.S. Department of Agriculture's quarterly hog report expected at 2 p.m. CDT (1900 GMT), traders said.
Analysts expect Friday's report to show further herd expansion during the March through May quarter compared with a year earlier.
"The market has already priced in some steep supply numbers from USDA, but the question is, how large?" said Allendale Inc chief strategist Rich Nelson.
July hogs closed 0.800 cent per lb higher at 75.450 cents, and August was up 0.675 cent at 72.825 cents.
Investors monitored softer cash and wholesale pork prices, with packers needing fewer hogs due to plant shutdowns during the Fourth of July holiday.
Retailers are expected to buy small amounts of pork until they determine how much product was sold over the July Fourth holiday weekend.
Market-ready, or cash, hogs in the Midwest on Friday morning traded steady to $1 per cwt lower than on Thursday, pressured by enough supplies to meet current packer demand, regional hog dealers said.
USDA data quoted Friday morning's wholesale pork price at $82.35 per cwt, down 29 cents from Thursday.
CME live cattle posted modest losses, pressured by bearish fundamentals, traders said.
June settled 0.100 cent per lb lower at 148.400 cents, and August was down 0.050 cent at 148.525 cents.
This week, cash cattle in the U.S Plains sold at mostly $148, feedlot sources said. That was $2 lower than a week ago.
Friday morning's wholesale choice beef price sagged 63 cents per cwt from Thursday to $254.53. Select cuts dropped 45 cents to $249.68, the USDA said.
Packers were less eager to compete for supplies with plants closed during the Fourth of July holiday, traders and analysts said.
Beef demand typically tapers off in early July as the onset of summer heat deters backyard barbecues, they said.
Sell-stops, weak back-month live cattle futures and the recent jump in corn prices dragged down CME feeder cattle contracts.
August closed 1.800 cents per lb lower at 217.250 cents per lb.