Chicago | Reuters — CME Group hog futures fell sharply for the second day in a row on Friday, with the most-active June contract sinking 2.9 per cent to its lowest since March 23.
Cattle futures also were weaker, with the June live cattle contract notching its seventh straight losing session.
The market was correcting from a sharp rally fueled by expectations of demand from restaurants picking up as COVID-19 restrictions were eased in the United States. But the reopening has slowed in many areas due to rising numbers of infections.
Additionally, forecasts for cold weather across much of the U.S. Midwest will delay grilling season.
“We got a little bit ahead of ourselves,” said Don Roose, president of U.S. Commodities in West Des Moines, Iowa. “For a grilling season you need warm weather and it is a little bit cool; that slows down stuff a bit.”
The benchmark June hog futures contract dropped three cents to settle on Friday at 101.7 cents/lb. at the Chicago Mercantile Exchange (all figures US$). Prices bottomed out at 100.925 cents.
The CME had temporarily expanded daily trading limits to 4.5 cents on Friday for the hog market after a limit-down move of three cents on Thursday.
CME June live cattle ended 0.475 cent lower at 119.175 cents/lb. August feeder cattle futures were down 1.45 cents, at 154.15 cents/lb.
Overall, U.S. meat processors slaughtered 113,000 cattle on Thursday, up from 111,000 cattle a week earlier, and 468,000 hogs, unchanged from a week ago, according to USDA.
— Mark Weinraub is a Reuters commodities correspondent in Chicago.