US cattle and hog futures seen bullish amid tight supplies

 

 

While cattle and hog futures in Chicago sagged, cash markets and beef and pork prices probably will continue to march higher this week, analysts said.

 

Tighter supplies of slaughter-ready animals should underpin both markets, analysts said. Additionally, spring fieldwork will keep many Midwest farmers occupied this week, further crimping the flow of pigs to market, analyst said.

 

Still, cash hog markets eroded earlier. Carcass prices in major Midwest markets averaged US$73.24 to US$73.58 per hundred pounds this morning, on average, down 34 cents to 79 cents, according to USDA.

 

Hogs averaged US$73.98 per hundredweight on a carcass basis at the end of last week, up US$2.90, or 4.1%, from the previous week.

 

In CME Group futures, April lean hogs rose 0.15 cent to 76.225 cents a pound. Most deferred contracts fell, with June hogs down 0.4 cent at 83.875 cents.

 

Little has changed in a bullish fundamental picture for cattle and hogs, analysts and traders said. Livestock inventories shrunk after losses the previous two years prompted producers to cut herds. Meanwhile, the US economy's improvement and the impending summer grilling season have boosted demand prospects for beef and pork.

 

In cattle, futures prices topped US$1 a pound last week for the first time since September 2008.

 

In futures trading, April cattle fell 0.65 cent to 99 cents a pound, while June cattle fell 0.7 cent to 94.05 cents.

 

On the wholesale market, choice beef cutout values averaged US$1.6567 a pound earlier today, up almost 20% this year and the highest price since July 2008. Additionally, cattle prices typically reach a seasonal peak in April, analysts noted.