Chicago | Reuters — Technical selling on Monday drove Chicago Mercantile Exchange live cattle futures to their lowest prices in more than five weeks, while lean hog futures recovered from a sell-off.
The cattle market’s losses brought the most-active April contract down six per cent from a life-of-contract high reached on Feb. 16.
Strong domestic and export demand for U.S. beef had been supporting cattle futures, though boxed beef prices declined on Monday. Choice cuts of beef dropped by $1.50, to $239.03/cwt, while select cuts declined by $2.09, to $227.64/cwt, according to the U.S. Department of Agriculture (all figures US$).
Some traders also said cattle futures look too high compared to cash prices.
CME April live cattle futures slid 1.025 cents to close at 118.975 cents/lb. and hit their lowest price since Jan. 21.
CME April feeder cattle touched a one-month low before ending down 1.45 cents at 141.125 cents/lb.
Meat processors slaughtered an estimated 120,000 cattle on Monday, up from 119,000 a week ago, according to USDA. They slaughtered 499,000 pigs, up from 489,000 a week ago.
In the pork market, CME April lean hog futures ended up 0.575 cents at 87.725 cents/lb. Prices recovered after dropping 2.9 per cent on Friday in a setback from a nearly two-year high on Thursday.
Traders said demand from pork buyers in China continued to underpin futures prices. China, the world’s top pork consumer, has grappled since August 2018 with the deadly pig virus African swine fever, which devastated its hog herd and raised the need for meat imports.
Malaysia plans to cull 3,000 wild and domestic pigs after an outbreak of African swine fever in wild boar and backyard pigs in the state of Sabah on Borneo island in mid-February.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.