U.S. lean hog futures rise on good demand – CME

October 17, 2022

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Chicago Mercantile Exchange (CME) lean hog futures hit a nearly three-week high on Friday as strong demand and improving margins for pork packers sparked buying ahead of the weekend , Reuters reportedciting traders as the source.

Another strong week of pork export sales added support, allaying concerns about increased supply of market-ready hogs, they said.

“Demand increases as the number of pigs increases seasonally. If we can move the pig during the biggest supply period of the year, the market will see that as encouraging,” said Matthew Wiegand, broker at FuturesOne.

December CME lean hog futures jumped 1.650 cents to settle at 82.250 cents a pound, their highest level since Sept. 26. The contract held technical chart support at its 20-day moving average and closed above its 30-day moving average.

Hog packers’ average margin rose to $16.72 per head on Friday, from $14.45 on Thursday and $10.80 a week ago, according to livestock marketing advisory service HedgersEdge.com LLC.

Net sales of fresh, chilled and frozen pork totaled 29,900 tons in the week ended Oct. 6, topping 25,000 tons in sales for at least the sixth straight week, according to U.S. Department of Agriculture data. (USDA).

Livestock futures finished mostly lower, under pressure from technical selling and fears that high inflation could hurt demand for premium cuts of beef.

December CME live cattle fell 0.150 cents to 147.775 cents a pound. The benchmark contract reached broad resistance at its 20-day moving average and failed to hold support at its 100- and 200-day moving averages, closing below the key technical level.

Firmer U.S. Plains spot cattle prices supported October’s spot, the single contract ending higher Friday at 146.950 cents a pound, up 0.500.

November CME feeder cattle finished down 1.325 cents at 174.775 cents a pound, weighed down by high feed corn prices.