U.S. livestock: CME hogs slump on technical selloff

(Gloria Solano-Aguilar photo courtesy ARS/USDA)

Chicago | Reuters — Chicago Mercantile Exchange lean hogs closed lower on Tuesday in the wake of technical selling that largely overshadowed bullish market fundamentals, said traders.

U.S. stock market volatility, after their worst ever daily point loss on Monday, kept CME livestock market traders on the defensive.

Some funds that bailed out of stocks in recent sessions have CME lean hogs, live cattle and feeder cattle futures in their portfolios. And a few livestock market investors see the stock market as a barometer for consumer sentiment regarding the economy.

February lean hog futures closed 1.075 cents/lb. lower at 74.75 cents (all figures US$). Most-active April finished down 1.9 cents at 71.425 cents.

Fundamentally, packers raised bids for slaughter-ready, or cash, hogs to maintain the flow of supplies in parts of the western Corn Belt impacted by wintry weather.

Tuesday morning’s wholesale pork prices were higher after some grocers booked loins for the approaching spring grilling season.

Cattle market on edge

CME live cattle futures settled lower on this week’s cash price uncertainty and stock market jitters, said traders.

“I don’t know if there’s a lot people in the cattle industry worried about that (stocks). But obviously everybody’s got one eye on the stock market,” said A+A Trading broker Jim Clarkson.

February live cattle closed down 0.5 cent/lb. at 125.625 cents. April settled 0.9 cent lower at 124.575 cents.

Packers in Kansas had bid $124/cwt for cash cattle that in the southern Plains were priced at $130, feedlot sources said. Last week, cattle in the U.S. Plains traded at $125-$126.

Roughly 900 animals for sale at Wednesday’s Fed Cattle Exchange could set the bar for this week’s overall cash trade.

Market bulls believe some packers might need supplies due to consistently cold temperatures in areas of the Plains slowing animal weight gains, thereby delaying their delivery to packing plants.

Bearish investors contend that lacklustre beef demand, slipping profits and current futures prices might deter processors from competing for cattle.

Live cattle futures declines and steady to lower cash feeder cattle prices dragged down CME feeder cattle contracts.

Firmer corn prices, which raises input costs for feedlots that fatten cattle, contributed to feeder cattle futures declines.

March feeders ended 0.95 cent/lb. lower at 148.725 cents.

— Reporting for Reuters by Theopolis Waters in Chicago.


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