Chicago | Reuters — Chicago Mercantile Exchange lean hog futures fell on Tuesday for the eighth time in nine sessions on concerns about pork demand and slumping pork prices, traders said.
The actively traded February lean hog contract dropped to a three-month low as packer margins eroded and the pork cutout price slid to the lowest in a year.
“There are traders expecting pork demand to pick up as prices go down to these levels. We’re waiting for some confirmation and whenever there’s a lack of confirmation you get discouraged selling by longs and some fresh short selling by funds,” said independent livestock trader Dan Norcini.
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The U.S. Department of Agriculture (USDA) quoted the pork cutout at $81.73/cwt on Tuesday, down 62 cents from the prior day and the tenth decline in 11 sessions (all figures US$). It was also the lowest pork cutout since Jan. 11, 2022.
The average pork packer margin on Tuesday fell to an estimated $4.65 per head, down from $15 a week ago, according to marketing advisory service HedgersEdge.com.
CME February lean hogs ended one cent lower at 79.8 cents/lb. after slumping during the session to the lowest point since Oct. 5.
Live cattle futures were steady to higher on Tuesday on tightening supplies and a firm cash market outlook.
Average cattle weights have declined, according to USDA data, following recent stressful conditions at feedlots due to harsh winter weather. The lighter cattle weights would reduce total beef production and underpin prices, traders said.
Cash cattle prices at Plains feedlot markets are expected to be steady to higher when trading develops later this week, they said.
February live cattle ended unchanged at 157.75 cents/lb. while April futures were up 0.125 cent, at 161.65 cents. March feeder cattle futures gained 0.2 cent, to 186.5 cents/lb.
— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago.
