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CME update: lean hog futures rise as producers sell market-ready pigs

CME lean hog futures gained on 10 August as producers looked to offload market-weight animals early to reduce feed costs.

11 August 2020, at 8:08am

Reuters reports that CME October lean hog futures settled 2.850 cents higher at 53.825 cents per pound.

While heavier slaughter weights continue to indicate a backlog of hogs, brokers reported indication that packers may be seeing supply trim.

"All the packers were out and about buying in cash negotiation country last week," said Scott Varilek, broker at Kooima & Kaemingk Commodities Inc. "Maybe they don’t have as many cattle around them as they’re letting on."

The US Department of Agriculture estimated Monday's hog slaughter at 482,000 hogs, 15 percent more than the 420,000 a week prior.

Varilek said there's indication producers are sending hogs with less weight, to cut down on feed expenses.

"Why keep feeding them, keep losing money?" he said. "I think the weights are coming down a little bit, and guys are moving hogs a little quicker."

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