Chicago Mercantile Exchange (CME) lean hog futures turned higher on Wednesday as fund investors adjusted their positions and sought short-covering, even as many contracts set new lows for a second trading day, Reuters reported, citing traders.
It was a day of volatile technical trading, despite weakness in grain futures and a government report showed an unexpected boost of domestic pork demand.
After the market closed on Tuesday, the US Department of Agriculture reported that the total stock of pork in cold storage as of May 31 was down nearly 9.38% from the same period a year earlier.
And though the report was seen as supportive for hog futures, prices roiled throughout the day in part because market participants are expecting USDA data will show a slightly larger US herd on Friday, said independent livestock trader Dan Norcini.
On Wednesday, most-active CME August hogs dipped to a new contract low of 86.225 cents per pound - and also jumped to the highest price seen since June 21 - before settling the day at 88.975 cents per pound, up 2.225 cents. CME July hogs closed 0.900 cent higher at 89.900 cents per pound and set a new contract low of 88.650 cents.
Meanwhile, CME cattle futures rose, as concern about ongoing flooding across parts of Iowa, Minnesota, South Dakota and Nebraska raised concerns about livestock deliveries to packing houses being delayed, said Karl Setzer, partner at Consus Ag.
The flooding has caused a snarl of transportation issues, with rail lines being washed out and roads impassable.
Such concerns about delivery delays in some markets prompted some cattle producers, feedlot operators and traders who work for meat packers to jump into the futures market on Wednesday, in a bid to hedge their financial risks and protect their positions, market analysts said.
CME August live cattle settled 2.325 cents higher at 186.750 cents per pound, and at one point touched the contract's highest price since October 13. CME August feeder cattle ended up 2.725 cents, to 261.775 cents per pound.
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