Chicago | Reuters — U.S. lean hogs tumbled to the lowest in 10 weeks on Friday as pork price declines triggered selling by technical traders and investment funds, traders and analysts said.
Hogs fell more than one per cent at the Chicago Mercantile Exchange, led by losses in deferred contracts such as June and August futures. The lowest corn prices in 9-1/2 months, after a bearish U.S. Department of Agriculture acreage outlook on Thursday, prompted ideas of hog herd expansion amid cheaper costs for animal fattening.
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Cattle futures on the Chicago Mercantile Exchange were mixed on Thursday, with fresh contract highs in the feeder cattle market while live cattle ran into resistance at their own highs to settle with small losses.
Hogs for April delivery settled 0.55 cent lower at 67.8 cents/lb., lowest since Jan. 21 and the third straight session of losses. Wholesale pork prices retreated from a nearly two-month high, suggesting flagging demand from grocers and consumers.
“Lean hogs (saw) additional chart-related selling fueled by Thursday’s drop in product prices,” INTL FCStone analyst Arlan Suderman said in a note to clients.
Live and feeder cattle futures were mostly lower, with feeder cattle consolidating after surging on Thursday as corn declined. Feeder cattle and corn prices typically move in opposite directions, as lower-priced feed improves margins for ranchers and can boost prices for cattle.
Cash cattle fetched lower prices this week in the southern U.S. Plains, moving at mostly $133/cwt, down about $3 from last week.
However, cattle prices have declined sharply in recent weeks, on Thursday falling to about 1-1/2-month lows. Technically oversold futures provided mild support to finish the week, resulting in only modest losses in most contracts.
“Seasonal (tendencies) would suggest we’ve reached a short-term bottom and could rebound into April,” Allendale Inc. analyst Rich Nelson said.
Live cattle for April delivery finished 0.05 cent higher at 132.975 cents/lb. and April feeder cattle down 0.875 cent to 156.2 cents/lb.
— Michael Hirtzer reports on agriculture and ag commodity markets for Reuters from Chicago.
