CME update: hog futures close mostly lower as grain prices hang over market

US lean hog futures closed lower on 8 January as traders contended with rising corn prices and expectations of further COVID-19 stimulus from incoming Biden administration.
calendar icon 11 January 2021
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Traders await direction from key crop reports due 12 January from the US Department of Agriculture. Most analysts surveyed by Reuters expect the USDA to lower its estimates of US corn production and 2020/21 ending stocks.

Rising corn prices hung over the market, signalling higher feed costs. Benchmark Chicago Board of Trade corn traded above $5 a bushel this week for the first time since 2014 before paring gains.

But back months in both the hog and cattle markets drew support from speculators steering investments into the commodity sector amid expectations for further government stimulus measures to prop up an economy battered by the coronavirus pandemic.

"We are moving into an inflationary environment," Smith said, adding that the incoming Biden administration "is going to open up the money spigot, big time, and that is bullish commodities; it's bullish hogs and cattle."

The US pork carcass cut-out value rose $1.18 on Friday afternoon to $81.00 per cwt.

Also on Friday, the USDA reported US November pork exports at 632.7 million pounds, up from 623.5 million a year earlier.

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