CHICAGO, April 1 (Reuters) - U.S. lean hog futures rose on Thursday, with several contract months including the benchmark June setting life-of-contract highs on firm cash markets and strong demand for pork, traders said.
Chicago Mercantile Exchange June lean hogs settled up 1.025 cents at 106.325 cents per pound, after recording a contract high at 106.725 cents.
Rising cash hog prices supported futures. The CME’s lean hog index, a two-day weighted average of cash prices, climbed to $98.50 per cwt, its highest since October 2014.
“Pork demand continues to be good. The packers seem to be having trouble getting numbers. They are having to compete for hogs and put higher cash on the board, and it’s keeping those front months elevated,” said Dan Norcini, an independent livestock trader.
Export sales of U.S. pork in the week to March 25 were robust at 61,000 tonnes, a marketing year peak, with China booking 29,700 tonnes and shipping 11,900 tonnes, the U.S. Department of Agriculture reported.
Domestic demand for pork and beef remains strong, with the start of the summertime grilling season coinciding with renewed demand from the food service sector amid expectations for the U.S. economy to rebound after the coronavirus pandemic.
“Traders are looking at the return of the restaurant business and consumers that are flush with cash from stimulus checks. They are expecting good, strong, red meat demand as we get into the spring and summer grilling season,” Norcini said.
However, CME live cattle futures closed lower, retreating after hitting fresh contract highs. Traders appeared to be booking profits ahead of the long Easter weekend, with most U.S. markets closed for Good Friday.
CME June live cattle settled down 0.350 cent at 122.550 cents per pound and May feeder cattle futures ended down 0.175 cent at 149.225 cents.
Cash cattle traded at $116 to $118 per cwt this week, up about $2 from last week, traders said.
Surging wholesale beef prices underpinned the market. Choice cuts of boxed beef were up $2.85 at $249.97 per cwt on Thursday, the USDA said, and select cuts added $6.57 to $244.70 per cwt.
Reporting by Julie Ingwersen; Editing by Tom Hogue
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