U.S. livestock: Lower cash, pork prices pull down CME hogs

A bacon-wrapped pork chop. (PorkBeInspired.com)

Chicago | Reuters — Chicago Mercantile Exchange lean hogs finished lower on Wednesday, pressured by weaker cash and wholesale pork prices, said traders.

Fund liquidation further weighed on the market, they said.

December hogs, which will expire on Dec. 14, ended down 0.45 cent/lb. at 63.825 cents (all figures US$). Most actively-traded February closed 1.55 cents lower at 68.95 cents, and below the 20-day moving average of 69.36 cents.

“Better hog numbers are still anticipated, which could influence prices lower later this month,” an analyst wrote in his newsletter to clients.

Based on increased hog weights, animals are now coming to market after backing up on farms over the Thanksgiving holiday and after a packing plant closed last week to install equipment, said analysts and traders.

Packers are expected to compete less for hogs prior to plants shutting down for the Christmas and New Year’s holidays.

Retailers are reluctant to buy large amounts of pork at a time when ham business is nearly done for the year-end holidays and as consumers focus on shopping for Christmas gifts, said analysts.

The U.S. Department of Agriculture (USDA) monthly export sales data on Wednesday showed U.S. pork in October totaled 494.6 million lbs., up 17.4 per cent from September and up 9.5 per cent from October 2016.

Live cattle futures retreat

Wednesday’s wholesale beef price pullback, and expectations for lower cash prices this week, weighed on CME live cattle futures, said traders.

Sell stops and technical selling hastened market losses, they said.

December live cattle finished down 0.525 cent/lb. at 115.9 cents. February ended 1.25 cents lower at 119.275 cents, and below the 100-day moving average of 119.352 cents.

The lack sales at Wednesday’s Fed Cattle Exchange suggests processors may have enough livestock for near-term production, a trader said.

A week ago, slaughter-ready, or cash, cattle in the U.S. Plains fetched $119 to $121/cwt.

Beef sales face headwinds from plentiful pork and poultry supplies, the trader said.

USDA’s export report showed total U.S. beef exports in October at 260 million lbs., up seven per cent from the month before and up 13 per cent from a year earlier.

CME feeder cattle futures slid to a three-month low for a second straight session on sell stops and lower live cattle futures, said traders.

January feeder cattle closed 1.8 cents/lb. lower at 146.025 cents.

— Theopolis Waters reports on livestock markets for Reuters from Chicago.

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