U.S. livestock review: Hogs end higher on boost from equities

U.S. lean hog futures also closed higher Wednesday, rebounding from sharp recent losses with help from stronger stock markets and short-covering.

CME lean hogs for October delivery ended up 1.5 cents or 1.8%, at 84.85 cents per pound.

After what Global Commodity Analytics and Consulting President Mike Zuzolo called a "train wreck" on Tuesday, when prices fell almost 3%, traders covered short positions Wednesday.

"It looks like some of the asset allocators think hog futures have sold off enough," said Ginzel.

A broad increase in equities Wednesday helped boost the U.S. demand outlook.

Growing supplies have weighed on prices recently, as cooler temperatures have enabled more hog production at greater weights. Even with Wednesday's gains, the October contract is down 9.5% from an Aug. 2 intraday high.

Cash hog bids were reported steady to weaker earlier in the day, but some livestock dealers predict that prices may stabilize or possibly even rally a bit if enough plants need additional loads to complete their weekend slaughter schedules. Some may also need additional loads to be added to their inventories for next week's operations.

Some producers may resist selling at the current lower prices after the cash market fell more than 23 cents a pound on a dressed basis since early August. That decline amounts to nearly $50 a head and pulls returns below break-even levels for some producers.

The terminal markets traded steady to lower.

The USDA's pork carcass composite value, a measure of wholesale prices, on Tuesday was down 77 cents at $93.93 a hundred pounds, the lowest since June 16.

Early projections for Saturday's slaughter range from 280,000 to 285,000 head.