“Hog supplies are still shrinking seasonally. Pork supplies are figuring to tighten up as well,” said Doug Houghton, technical analyst at Brock Capital Management, noting the fundamentals remain supportive for higher hog futures. “It looks like we’re starting a new upward move.”
CME most-active June lean hogs added 3.000 cents to 109.725 cents per pound, with life-of-contract highs set in contracts from July 2021 through April 2022.
For the week, June hogs added 4.000 cents, a 3.8% gain, climbing 19 of the last 20 weeks.
The lack of available hogs has pushed packer margins negative, with packers seeing a $20.10 loss per head on Friday, according to Denver-based livestock marketing advisory service HedgersEdge.com LLC.
Hog slaughter eased, with 470,000 head processed on Friday, down slightly from a week ago, but 2.403 million processed for the week.
Meanwhile, U.S. live cattle futures gained, while feeder cattle continued to fall as climbing corn futures translated to higher feed costs, traders said.
CME’s June live cattle futures added 0.525 cent to 116.575 cents per pound, while August feeder cattle futures lost 3.125 cents to close at 146.300 cents per pound.
For the week June live cattle gained 0.850 cent, while August feeder cattle lost 3.600 cents, a 2.4% weekly loss.
“Because of the higher feed prices, people are still trying to move market-ready cattle supplies,” said Houghton. “Packers seem to have the upper hand still.”
Beef packer margins climbed to $651.10 per head, according to Hedgersedge.
Beef packer profitability is led by strong consumer demand, as choice beef cutouts added $2.74 per cwt. to $296.50, while select cuts gained $3.26 to $283.05, according to the U.S. Department of Agriculture. (Reporting by Christopher Walljasper in Chicago; Editing by David Gregorio)