Chicago | Reuters — Chicago Mercantile Exchange lean hogs fell to their lowest in almost two years on Tuesday, weighed down by sluggish wholesale pork demand and ample hog supplies, traders said.
February closed 1.35 cents per pound lower at 78.575 cents and April finished down 1.45 cents, to 81.35 cents (all figures US$)
On Tuesday morning, slaughter-ready or cash hogs in the Midwest sold mostly 50 cents per hundredweight (cwt) lower, according to regional dealers.
The morning’s wholesale pork price fell 87 cents/cwt from Monday to $82.43, the U.S. Department of Agriculture said.
Investors await a seasonal hog price recovery that has yet to materialize because of abundant supplies after packers closed plants over the New Year’s holiday, traders said.
Cheaper gasoline allowed consumers to have more disposable income but they appear to be spending it on goods other than expensive cuts of meat, said John Kleist, analyst with EBOTTrading.
Hog futures drew additional pressure from the continued selloff on Wall Street and the stronger dollar that could hurt U.S. meat exports.
Cattle down but off lows
CME live cattle buckled under profit-taking and outside market pressure but finished off session lows due to higher cash and wholesale beef prices.
February live cattle closed down 0.2 cent/lb. to 166.025 cents and April was 0.45 cent lower at 165 cents.
The morning’s choice wholesale beef price rose $1.16/cwt from Monday to $250.52. Select cuts gained 41 cents to $240.84, according to USDA.
On Tuesday, some cash cattle in the U.S. Plains moved at $168-$170/cwt, up from $166-$169 last week, feedlot sources said. Other feedlots are holding out for more money for remaining cattle, they said.
Packers showed how much they need cattle by competing for them on Tuesday rather than later in the week, a feedlot source said.
Cattle weights have declined in parts of the Plains as animals burn energy in frigid temperatures as they move around mud and snow in some feedyards, he said.
Processors charged retailers more for beef to offset higher cattle costs, he said.
Profit-taking, fund liquidation and live cattle market selling pulled down CME feeder cattle.
January closed down 0.975 cent/lb. to 224.7 cents, and March ended 2.5 cents lower at 220.875 cents.
— Theopolis Waters reports on livestock futures markets for Reuters from Chicago.