Chicago | Reuters — Chicago Mercantile Exchange lean hog futures crumbled to new life-of-contract lows on Thursday, before finishing mixed, on concerns about poor demand for U.S. pork, analysts said.
The market has tanked since last week, with additional pressure stemming from weak cash prices and larger-than-expected supplies of hogs. The front-month contract is down 13 per cent since March 10.
“Clearly I think there’s some major demand concerns,” said Doug Houghton, an analyst for Brock Associates.
Front-month April lean hogs settled down 0.325 cent at 75.75 cents/lb., after hitting a contract low of 75.125 cents (all figures US$). June hogs closed 0.025 cent higher at 89.375 cents/lb., after setting a contract low of 87.8 cents.
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The sell-off has been overdone and the market could be ripe for a technical rebound, though demand concerns remain, traders said.
“Until we see some improvement in pork demand and seasonal traditional declines in the hog supplies, then I don’t know how much of a turnaround we’re going to get,” Houghton said.
The U.S. Department of Agriculture (USDA) said ham cutout values eased seven cents to $69.94 per hundredweight (cwt), after a steep drop last week. Bellies jumped $2.53 to $84.64 per cwt, while the carcass cutout rose 44 cents to $80.30 per cwt.
Frozen U.S. pork supplies at the end of February were up nine per cent from last year, USDA said separately in a monthly Cold Storage report. Total ham supplies were up one per cent, while stocks of pork bellies were up 42 per cent from last year.
Total pounds of beef in freezers, meanwhile, were down six per cent from last year, USDA said.
In the beef markets, CME April live cattle settled down 0.15 cent at 162.15 cents/lb. April feeder cattle finished up 0.625 cent at 195 cents/lb.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.
