CME lean hogs drop as pork prices decline, cattle higher
Trading volumes were lighter than normal and investors squared positions ahead of the long U.S. Independence Day holiday weekend, with markets closed on Friday.
Declining cash pork and cash hog prices have pressured hog futures this week and the market has "officially put in a seasonal top," said Rich Nelson, chief strategist with Allendale Inc.
CME August lean hogs ended down 1.800 cents at 106.100 cents per pound after hitting their lowest level since June 3. The actively traded contract was down 3.8% in the week in a second straight weekly decline.
The pork carcass cutout value fell for a seventh straight session, down $1.25 in Thursday's morning update at $109.50 per cwt, according to the U.S. Department of Agriculture.
Cattle futures closed firm on Friday as traders weighed current tight supplies and good packer margins against a downturn in cash beef prices.
CME August live cattle ended 1.600 cents higher at 214.050 cents per pound and August feeder cattle futures finished the day up 0.475 cent at 309.500 cents per pound. Monday's announcement of a phased resumption of imports from Mexico promised to help bolster supplies in the coming months after concerns about New World screwworm in herds south of the border shut off U.S. imports on May 11.
The choice boxed beef cutout fell $4.09 on Thursday morning to $390.77 per cwt while the select cutout fell $1.32 to $378.99 per cwt, according to the USDA.
Average beef packer margins stood at $104.75 per head on Thursday, up from $31.93 a week ago, according to livestock marketing advisory service HedgersEdge.com LLC. (Reporting by Karl Plume; Editing by Cynthia Osterman)
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