CME hog futures firm on summer demand, tight supplies

CHICAGO — Chicago Mercantile Exchange Group Lean Hog Futures firmed on Wednesday, supported by strong demand that has pushed cash prices higher.

“We’re still looking at tighter supplies in front of us,” said Rich Nelson, chief strategist at Allendale Inc.

Pork demand firms during the summer, with U.S. grilling holidays like Fathers Day and Independence day still ahead.

The nearby June hogs contract firmed 1.825 cents to 109.800 cents per pound. Most-active July hog futures added 4.425 cents to 112.425 cents per pound.

The CME’s Lean Hog Index, a two-day weighted average of cash hog prices, added 22 cents to $105.15 per cwt.

News of easing COVID restrictions in China on Tuesday added support, as relaxed lockdowns could mean increased pork exports to the nation.

Live cattle futures also firmed, supported by optimism around expanded processing capacity as the U.S. Agriculture Department attempts to strengthen the U.S. food system.

CME June live cattle firmed 2.275 cents to 132.800 cents per pound, while the most-active August live cattle gained 2.525 cents to 132.900 cents per pound. CME August feeder cattle added 4.600 cents to 169.725 cents per pound, supported by lower corn futures.

Beef packers slaughtered 125,000 head of cattle on Wednesday, in line with the week ago pace and up 15.74% from the same day in 2021.

Prices for choice cuts of boxed beef eased 12 cents to $267.42 per cwt, while select cuts firmed 26 cents to $248.91, according to U.S. Agriculture Department data.

Cash cattle traded from $135 per cwt. in the Southern U.S. Plains to $138 per cwt. in the Northern Plains, the USDA said.

(Reporting by Christopher Walljasper; Editing by Shinjini Ganguli)