Chicago | Reuters — Chicago Mercantile Exchange lean hog futures fell on Wednesday as cash hog prices remained soft and wholesale pork prices lingered near two-year lows, traders said.
“We continue to search for a bottom on the hogs, and the cash market stays under pressure,” said Don Roose, president of Iowa-based U.S. Commodities. “It’s slow demand on the export front, and the domestic demand can’t seem to grab hold,” Roose said.
CME February lean hog futures settled Wednesday down 1.125 cents at 77.325 cents/lb. and most-active April futures fell 1.925 cents at 86.2 cents/lb. (all figures US$).
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The U.S. Department of Agriculture said the pork carcass cutout dipped to $77.44 per hundredweight (cwt) on Tuesday, the lowest reading since mid-January 2021, before inching up to $77.89 on Wednesday afternoon.
The CME Lean Hog Index, a two-day weighted average of cash hog prices, fell to $74.18/cwt, its lowest in a year.
Meanwhile, demand from China, a significant buyer of U.S. pork, has stalled as the Asian nation struggles with excess supplies. China’s agriculture ministry on Wednesday urged farmers to take measures to reduce pork output, which hit an eight-year high in 2022.
CME live cattle futures ended narrowly mixed, consolidating a day after the front two contracts fell to four-week lows. February live cattle settled down 0.2 cent at 156.8 cents/lb. while April futures finished up 0.125 cent at 160.225 cents.
CME March feeder cattle futures ended up 0.425 cent at 181.725 cents/lb.
Wholesale beef prices declined. Choice cuts were priced at $274.08, down $2.58 from Tuesday, while select cuts fell 67 cents, to $253.86/cwt, USDA said.
Brokers await USDA’s monthly Cattle on Feed report on Friday. Analysts surveyed by Reuters on average expected the government to report the number of cattle in U.S. feedlots as of Jan. 1 at 11.652 million head, down 3.2 per cent from a year ago. Analysts on average estimated feedlot placements in December at 1.784 million head, down nine per cent from a year ago.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago.
