Chicago | Reuters — Chicago Mercantile Exchange lean hog futures fell nearly two per cent on Wednesday as falling wholesale pork prices and worries about the health of the global economy triggered a round of long liquidation, traders said.
CME October lean hogs settled down 1.55 cents at 94.425 cents/lb. and most-active December hogs fell 1.725 cents to end at 86.45 cents/lb. (all figures US$).
The U.S. Department of Agriculture priced pork carcasses at $100.35 per hundredweight (cwt) on Wednesday afternoon, down $4.60 from Tuesday and a one-week low.
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U.S. livestock: Feeder cattle extend rally to new highs
Chicago Mercantile Exchange feeder cattle futures extended gains to record highs on Wednesday while live cattle futures set a contract high before pulling back.
“When the morning cut-out showed a sharp drop in price, that seemed to be the trigger event. That gave the longs a good reason to take profits and get out,” said Dan Norcini, an independent livestock trader.
Commodity funds hold net long positions in CME lean hog and cattle futures, leaving both markets prone to bouts of long liquidation.
Cattle futures also fell on Wednesday, joining broad weakness in grains, crude oil and equity markets as the Federal Reserve raised interest rates by another 75 basis points, as expected, and signaled more large increases in its battle to contain inflation.
CME October live cattle ended down 0.425 cent at 145.875 cents/lb. and most-active December fell 0.325 cent to settle at 150.75 cents/lb.
October feeder cattle futures settled down 0.8 cent at 179.225 cents/lb. and November feeders fell 0.95 cent to close at 180.325 cents.
Traders await Friday’s monthly USDA Cattle on Feed report. Analysts surveyed by Reuters on average expect the government to report the number of cattle in U.S. feedlots at 11.234 million head as of Sept. 1, roughly unchanged from a year earlier. August marketings were seen at 105.9 per cent of a year earlier while placements were seen at 97.3 per cent of a year ago.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago.
