Chicago | Reuters — Chicago Mercantile Exchange lean hog futures dropped to their lowest prices in more than six months on Tuesday, while cattle futures recovered a day after hitting June lows on concerns about a fire at a major Nebraska beef plant.
The hog market extended recent losses under pressure from concerns about the potential for easing U.S. export demand and rising supplies, analysts said.
Pig prices in China, the world’s biggest pork consumer, are substantially lower than in the United States, raising worries that Chinese buyers will reduce purchases, said Don Roose, president of Iowa-based broker U.S. Commodities.
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China’s hog prices have tumbled this year on increased supplies and over fears from fresh outbreaks of the pig disease African swine fever.
“On the export front, I think there’s some real concern,” Roose said.
CME October lean hog futures ended down 0.4 cent at 80.375 cents/lb. and hit their lowest price since March 4. December hogs fell 1.2 cents, to 72.175 cents/lb., and hit its lowest price since Feb. 26.
In the cattle market, the rebound in futures prices came as meatpacker JBS said it resumed operations at a beef plant at Grand Island, Nebraska after a fire halted production on Monday.
The JBS plant has the capacity to slaughter 6,000 cattle a day, about five per cent of U.S. cattle, according to industry estimates.
Meatpackers on Tuesday slaughtered 120,000 cattle nationwide, up from 114,000 on Monday, according to U.S. Department of Agriculture data.
CME December live cattle closed up 2.5 cents at 129.65 cents/lb. after falling Monday to their lowest price since June 1. October feeder cattle climbed 2.7 cents, to 158.15 cents/lb., after touching its lowest since June 11 on Monday.
“We just overdid it to the downside,” Roose said.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.
