Chicago | Reuters — Chicago Mercantile Exchange (CME) lean hog futures ended mixed on Tuesday after matching a contract high because of tight U.S. supplies and firm cash markets, analysts said.
The hog market has surged this year due to strong domestic demand and solid export sales to China, the world’s biggest pork consumer.
Profit-taking and technical selling dragged down most-active July hogs after the contract reached 123.6 cents/lb., its contract high from Monday.
July hogs ultimately settled 0.3 cent lower at 121.8 cents/lb. The pork cutout ended at $134.94/cwt, up slightly from Monday.
In the beef market, CME August live cattle futures ended up 0.05 cent at 117.825 cents/lb.; August feeder cattle closed 0.95 cent lower at 149.25 cents/lb.
Wholesale beef prices took a step back from recent surges, with select cuts falling $2.99, to $306.18/cwt, according to the U.S. Department of Agriculture. Choice cuts rose one cent, to $338.61/cwt.
Profit margins for beef processors were $895.70 per head of cattle, up from $827.65 a week ago, USDA said. Margins for pork processors were $27.35 per hog, up from $24.65 last week.
Livestock producers have grappled with high costs for animal feed after U.S. grain prices topped eight-year highs.
Chicago Board of Trade corn and soybean futures rose on Tuesday after a government report showed the condition of crops was worse than expected as a heat wave hit the U.S. Midwest.
In Brazil, chicken producers contracted to supply BRF Brasil Foods, the world’s biggest poultry exporter, decided to stop fattening chicks next week unless it paid higher prices to cover rising production costs.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.