Chicago | Reuters — CME lean hog futures sank to a three-month low and closed weaker for the seventh consecutive session on Friday on concerns about weak demand, brokers said.
An increase in hog weights also hung over the market, after recent winter storms delayed processing and backed up livestock on farms, brokers said.
Pork processors slaughtered an estimated 453,000 hogs on Friday, compared to 451,000 hogs a year earlier, the U.S. Department of Agriculture said. Average hog weights in Iowa, southern Minnesota and South Dakota reached 289.9 lbs. as of Dec. 31, up 6.7 lbs. from a week earlier, according to the latest agency data.
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“Slaughter is steady but weights are up,” said Karl Setzer, brokerage research lead at Mid-Co Commodities.
CME February lean hogs ended down 2.25 cents at 80.275 cents/lb. and reached their lowest price since Oct. 7 at 80.125 cents (all figures US$).
U.S. pork inventories are adequate while demand may suffer as consumers continue to grapple with inflation, Setzer said. In December, hourly wages — the price of labour — grew at the slowest annual pace in 16 months.
Worries about overall demand for commodities and economic headwinds, including surging COVID-19 cases in China, also continued to loom over livestock futures, analysts said.
“There is no urgency in this market right now,” Setzer said.
Live cattle futures also settled lower, with the benchmark February contract dropping 0.575 cent, to 156.775 cents/lb. In feeder cattle futures, the March contract slid 0.9 cent, to 185.65 cents/lb.
Wholesale prices for choice cuts of boxed beef rose by $1.36, to $282.99 per hundredweight, while select cuts increased by $2.39, to 259.34/cwt, USDA said.
USDA separately reported weekly net U.S. beef export sales were 12,500 tonnes for 2023, with reductions of 6,900 tonnes for 2022. Weekly net U.S. pork export sales were 73,600 tonnes for 2023, with net sales reduction of 51,900 tonnes for 2022.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.
