CHICAGO, July 9 (Reuters) - U.S. lean hog futures rose on Thursday as firmer cash markets for hogs and some pork products supported thinking that the market may have bottomed out after declining for much of 2020, traders said.
Chicago Mercantile Exchange (CME) August lean hog futures settled up 2.275 cents at 50.225 cents per pound, crawling back after dipping to a life-of-contract low of 47.525 cents on June 29.
Ample U.S. hog supplies have depressed hog and pork prices in recent months. But hog futures jumped on Thursday after the U.S. Department of Agriculture showed cash cutout prices for hams surging late on Wednesday to $54.22 per cwt, from $38.19 a day earlier.
“Lean hog futures are notably higher following an impressive increase in pork product prices Wednesday afternoon, suggesting that cheap prices are buying demand,” StoneX chief commodities economist Arlan Suderman wrote in a client note.
Also, cash hog prices in the closely watched Iowa and southern Minnesota market rose by $1.72, according to the USDA, a move some saw as a bullish signal.
“People are probing for a bottom in this hog market,” said Dan Norcini, an independent livestock trader.
CME live cattle futures closed modestly higher on expectations for steady to firmer cash cattle prices this week, but uncertainty about beef demand hung over the market, capping rallies.
Prices for choice cuts of boxed beef on Thursday afternoon declined 24 cents to $203.59 per cwt and select cuts fell $0.69 to $194.83 per cwt, according to the USDA.
“Beef demand in the middle of the summer is generally not good,” Norcini said.
CME August live cattle settled up 0.100 cent at 99.250 cents per pound. August feeder cattle rose 0.475 cent to 134.525 cents per pound.
Traders await the USDA’s monthly agricultural supply/demand reports on Friday. (Reporting by Julie Ingwersen; Editing by Tom Brown)
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