Chicago | Reuters — U.S. lean hog futures fell three per cent or more on Monday, with many contracts reaching lifetime lows on pressure from robust hog supplies and technical selling, traders said.
Live and feeder cattle futures were mostly lower at the Chicago Mercantile Exchange, weighed down by profit-taking after cattle earlier hit multi-week highs.
“The bottom line is that there’s an awful lot of protein out there and you have to get aggressive to get it to move,” CHS Hedging analyst Steve Wagner said of grocers discounting meat prices in efforts to entice buyers.
Front-month CME October lean hogs finished 0.55 cent lower at 54.925 cents/lb., holding just above its lifetime low of 54.55 reached on Sept. 15 (all figures US$).
However, most other hog contracts fell to new lows. Most-active December hogs plunged more than three per cent to finish 1.775 cents lower at 48.175 cents, knocking out its previous low reached on Thursday.
Losses in futures came as cash hog prices extended declines. The U.S. Department of Agriculture in a report issued after the close of futures trading said hog prices declined by 53 cents to an average of $55.37/cwt in the key Iowa and southern Minnesota market.
“Cash (hogs) are already very low and looking to go lower with the huge amount of pork that will be killed this fall,” a hog futures trader said.
USDA forecast record-large U.S. hog and pork production this year and will update its outlook in a quarterly report due on Sept. 30.
CME October live cattle settled 0.25 cent higher at 107.9 cents/lb. while more-active December cattle were down 0.7 cent to 107.35 cents/lb.
Live cattle earlier rose to the highest levels since late-August before coming off those highs as investors locked in profits following three straight sessions of gains.
CME October feeder cattle were off 1.175 cents to 131.775 cents/lb., easing after running into upside resistance at its 20-day moving average.
— Michael Hirtzer reports on agricultural commodity markets for Reuters from Chicago.