CHICAGO, June 25 (Reuters) - U.S. lean hog futures were mostly higher on Thursday, lifted by firmer cash hog markets and position squaring ahead of a quarterly hog inventory report that was released after the close.
Futures have been sliding for most of the past two months as hog supplies swelled due to numerous packing plant closures as workers were infected by the coronavirus.
Prices in both cash and futures markets have been showing signs of bottoming, with cash hogs in the Iowa and southern Minnesota cash market trading $1.50 per cwt higher on Thursday.
Chicago Mercantile Exchange July lean hogs jumped 1.000 cent to 46.925 cents per pound, while actively traded August added 0.075 cent to settle at 51.325 cents per pound. Deferred contracts were up as much as 1.075 cents.
Futures, however, could come under pressure on Friday after the U.S. Department of Agriculture (USDA) released its latest hog inventory report.
The agency pegged the June 1 swine inventory up 5% from a year earlier at a record high for the period and ahead of trade expectations for a 3.7% rise. It was also a record-large quarterly supply for a second straight quarter, USDA data showed.
The 120- to 179-pound-hog category was particularly bearish, analysts said, suggesting hog prices would remain under pressure as hog supplies could again overwhelm available slaughter capacity.
“Fall slaughter is going to be huge and we’re going to stay under price pressure for much of the fall,” David Miller, chief economist for Decision Innovation Solutions, said during a National Pork Board post-report conference call.
CME live cattle futures ended mixed, while feeder cattle were firmer, helped by lower corn prices.
August live cattle were 0.275 cent lower at 96.075 cents per pound while August feeder cattle gained 0.375 cent to close at 133.250 cents per pound. (Reporting by Karl Plume, Tom Polansek and Julie Ingwersen; Editing by David Gregorio)