CHICAGO, July 20 (Reuters) - Chicago Mercantile Exchange lean hog futures gained on Tuesday on short covering and continued firmness in the wholesale pork market, traders said.
"August seems like its anchored by what’s going on in the cutout," said Altin Kalo, economist at Steiner Consulting Group. "They’ve been surprised by the strength in the pork cutout."
CME August lean hog futures gained 0.525 cent to 105 cents per pound, while October firmed 1.650 cents to 91.025 cents.
Slaughter is expected to increase as supplies of market-ready hogs increase moving into the fall, Kalo said. Daily hog slaughter increased to 474,000 head on Tuesday, up 2.16% versus the week prior, the USDA said.
Slim supply has kept the CME's lean hog index, a two-day weighted average of cash prices, firm, climbing to $112.26 per cwt, its highest since June 28.
"You’ve got the combination of lower hog kills and lower weights, that has reduced supply availability on the spot market," said Kalo.
Meanwhile, CME live cattle futures followed wholesale beef prices lower, while feeder cattle were pressured by climbing corn prices.
CME's most-active October live cattle futures fell 0.400 cent to 124.700 cents per pound, ending the session just above its 100-day moving average, while nearby August futures lost 0.475 cent to 119.775 cents.
"We’re seeing a decline in beef prices across the board, at the wholesale level, and so there’s nothing there to be excited about," said Kalo.
Boxed beef prices were mostly lower, with choice cuts
falling $1.43 to $265.06 per cwt and choice cuts adding 2 cents
to $249.51 per cwt, the USDA said.
CME August feeder cattle finished 1.85 cents lower at 155.525 cents per pound.
(Reporting by Christopher Walljasper; editing by Richard Pullin)
