Chicago | Reuters — Chicago Mercantile Exchange lean hog futures ended lower on Wednesday in a retreat from early gains in which the most-active contract topped a one-week high.
Traders watched a rally in grain prices that makes it more expensive to feed livestock. Corn and soy futures soared at the Chicago Board of Trade after the U.S. Department of Agriculture estimated that U.S. farmers planted fewer acres of the crops than analysts expected.
USDA, in a separate weekly report, said average hog weights dropped by about one per cent to 276.9 lbs. in the week ended June 26. That was down 2.7 per cent from a year earlier.
Skinnier pigs signal less pork after U.S. farmers have already reduced the size of the country’s herd. The number of all U.S. hogs and pigs as of June 1 was down two per cent from the previous year, USDA said last week.
CME August hog futures reached up to 104.6 cents/lb., the highest price since June 22 (all figures US$). The contract settled down 0.375 cent at 103.25 cents/lb.
The market has attempted to recover since hitting a nine-week low of 96.5 cents/lb. last week, analysts said.
The wholesale U.S. pork carcass cutout price slipped $0.38 to $113.84 per cwt, according to USDA data.
In the beef market, CME August live cattle futures settled 0.8 cent higher at 122.725 cents/lb. CME August feeder cattle sank 2.775 cents, to 154.625 cents/lb., as grains prices soared.
Prices for choice cuts of boxed beef slid by $1.05, to $291.29/cwt, while prices for select cuts fell by $1.13, to $269.27/cwt, according to USDA.
On Thursday, traders will review weekly USDA export sales data to assess demand for U.S. beef and pork.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.