CHICAGO (Dow Jones)–End-of-month position squaring that should include
short-covering is expected to pull up Chicago Mercantile Exchange hogs early
June and July contracts’ closer price proximity to CME’s lean hog index may
stir buyer interest. Thursday’s $1.07 per hundredweight wholesale pork carcass
price bounce that boosted packer margins is a market plus.
Nonetheless, steady-to-weak cash hog price calls suggests some processors
remain focused on conserving margins despite being faced with tight supplies.
A few traders said they would not be convinced that futures have reached a
near-term bottom until cash and wholesale pork values string together two or
more days of consistent gains.
CME live cattle firmness is seen at the start on spillover from Thursday’s
market advances and lingering buying tied to front-months’ price discounts to
this week’s cash sales.
Packers this week generally paid $98 to $99.50 per hundredweight for
cash-basis cattle, compared with $99 to $99.50 a week ago.
Traders have limited fundamental influence to draw from after the bulk of
this week’s cash cattle business was concluded by Thursday. Wholesale beef
prices have wavered recently, but beef packer margins remain strong.