Chicago | Reuters — Chicago Mercantile Exchange lean hog futures fell to their lowest level since early December on Tuesday, with ample supplies dragging down cash prices for a ninth straight session, said traders.
April hogs ended 1.125 cents/lb. lower at 63.675 cents, and May closed down 1.225 cents to 68.175 cents (all figures US$).
Tuesday morning’s average cash hog price in Iowa/Minnesota at $61.81/cwt fell 43 cents from Monday, according to the U.S. Department of Agriculture.
USDA estimated Monday and Tuesday’s total combined hog slaughter at 887,000 head, 16,000 more than a year ago.
Hogs are more plentiful as moderating spring temperatures in the U.S. Midwest allow pigs to quickly put on weight.
Fewer hogs are needed by processors that plan to cut Saturday slaughters to underpin their margins. Packing plants will also shutdown during the Easter holiday.
The prospect of decreased meat supplies resulting from reduced plant operations may have triggered retail meat buying, said traders and analysts.
U.S. government data on Tuesday morning showed the average U.S. wholesale pork price at $77.30/cwt, $1.41 higher than on Monday.
Lower cattle futures close
Sell stops and technical selling sent CME live cattle futures lower, said traders.
They said softer cash price expectations for this week discouraged futures buyers.
April live cattle closed 1.2 cents/lb. lower at 118.225 cents, and June ended down 1.4 cents, to 109.3 cents.
Both contracts settled below their respective 20-day moving average of 119.315 and 109.987 cents.
Last week the bulk of market-ready, or cash, cattle in the U.S. Plains moved at $128-$130/cwt.
Significantly more cattle for sale than last week, and ample supplies of animals contracted against the futures market, may pressure this week’s cash prices, said traders and analysts.
Although the recent downturn in beef cutout values might have generated retail buying on Tuesday, beef demand tends to decrease in early April, said traders.
Beef demand will resume its downtrend, taking cash and futures down along with it, said Archer Financial Services broker Dennis Smith.
Tuesday morning’s average wholesale beef price, or cutout, jumped $1.30/cwt from Monday to $214.73. Select cuts climbed $1.61, to $202.96, USDA said.
Investors await Wednesday’s Fed Cattle Exchange sale of about 3,500 animals for cash price direction.
Sell stops and live cattle futures selling sent CME feeder cattle lower. April feeder cattle closed 2.05 cents/lb. lower at 131.025 cents.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.