Lean Hog Futures Surge to New Highs on Cash Market, Pork Demand
U.S. lean hog futures prices surged to a nearly two-year high, bolstered by strong U.S. consumer demand and tight near-term supplies. June hog futures, the front-month contract, settled up 1.075 cents, or 1.1%, to 99.2 cents a pound at the Chicago Mercantile Exchange. That is the highest closing price for the front-month contract since August 2011. July hog futures, the most actively traded contact, rose Monday by their exchange-imposed daily limit of three cents during the session and settled up 1.7 cents, or 1.8%, to 97.9 cents a pound. Hog futures have climbed for much of the past two months, buoyed by domestic pork demand that has exceeded some analysts' expectations.
U.S. live-cattle futures ended lower amid pressure from a weaker cash market and wholesale beef prices. CME live cattle for June ended down 0.925 cent, or 0.8%, to $1.192 a pound. August feeder cattle closed down 0.2 cent to $1.43125. The market fell after disappointing cash-market trades emerged late Friday afternoon. Both volumes and prices were lower than expected, traders said. Lackluster beef demand and falling wholesale beef prices also hang over the market, although wholesale prices rebounded Monday.
U.S. corn futures settled at a more than two-week closing low Monday, as lighter-than-expected weekend rain in parts of the Corn Belt damped concerns about planting delays for the crop. Chicago Board of Trade July corn settled down 16 1/4 cents or 2.4% at $6.50 a bushel, the lowest settlement for the front-month contract since May 21.
Soybean futures also fell on the lighter-than-expected rains in the Midwest. Wet weather has also raised worries about delayed planting for soybeans, and greater chances for farmers to seed crops point to a larger likely harvest this fall. July soybean futures fell 16 1/2 cents or 1.1% to $15.11 3/4 a bushel, a one-week low.
Wheat futures were pulled lower by the declines in corn, as the two grains are direct substitutes in animal feed. But concerns about planting delays for spring wheat in North Dakota prevented wheat from falling as sharply as corn.
CBOT July wheat futures fell 6 1/2 cents or 0.9% to $6.89 3/4 a bushel, a two-week closing low. KCBT July wheat fell 9 cents or 1.2% to $7.26 a bushel. MGEX July wheat fell 8 1/4 cents or 1.0% to $8.11 1/2 a bushel.
Cotton futures rallied to a near four-week high Monday as investors worried about the near-term availability of U.S.-grown fiber. Cotton for July delivery on the ICE Futures U.S. exchange settled 2.1% higher at 86.65 cents a pound, the highest settlement since May 14.
Crude-oil futures settled slightly lower Monday as traders reacted to weekend data showing sluggish economic growth in China. Light, sweet crude for July delivery settled lower by 26 cents, or 0.27%, at $95.77 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange settled 61 cents lower at $103.95 a barrel. Nymex July reformulated gasoline blendstock was down for the first time in six days, after it rose 4.2% last week to settle at its highest level since May 20. Front-month July reformulated gasoline blendstock, or RBOB, settled 2.34 cents lower at $2.8481 a gallon. July ULSD heating oil settled 0.93 cent lower at $2.8838 a gallon.
Natural gas futures settled at a fresh three-month low Monday, as elevated U.S. stockpiles and uncertain cooling demand weighed on prices. Natural gas for July delivery settled 2.8 cents, or 0.7%, lower, to $3.80 a million British thermal units on the New York Mercantile Exchange, the lowest front-month settlement since March 13.
Unlike Friday, the stock market didn't provide a lot of trading excitement Monday. The major indices spent time on either side of the unchanged mark, but were never able to achieve a good deal of separation either way as buyers and sellers alike lacked conviction. The Dow Jones Industrial Average closed at 15238, down 9 points. Nasdaq climbed 4 points to finish the day at 3473. The S&P 500 was stagnant at 1642.