Lean hog futures tumble to contract lows - CME

April live cattle settle lower
calendar icon 23 March 2023
clock icon 2 minute read

Chicago Mercantile Exchange (CME) lean hog futures tumbled to contract lows again on Wednesday on concerns about lower demand, Reuters reported, citing analysts.

Worries about the risk for a recession to reduce consumers' meat purchases hung over livestock markets, particularly for expensive cuts, said Arlan Suderman, chief commodities economist for broker StoneX. Wheat and soy futures also crumbled.

"The whole agriculture sector seems to have a cloud over it - a recession fear cloud - so money flow is negative," Suderman said.

Demand worries added more pressure to lean hog futures as pork cutout values have declined, traders said.

The US Department of Agriculture (USDA) priced pork carcasses at $79.86 per hundredweight (cwt), down $1.66 from Tuesday. Hams sank by $4.98 to $70.01 per cwt, after a steep drop last week. Bellies, used to make bacon, fell $3.83 to $82.11 per cwt.

"One item more than any other has impacted the wholesale price so far ‐ bellies," Steiner Consulting Group said in a note. "How much belly prices recover in the next three months will be critical for hog values this summer."

Front-month April lean hogs settled down 0.975 cent at 76.075 cents per pound, after hitting a contract low at 75.950 cents.

Thinly traded May hogs set a contract low at 82.925 cents, before ending down 1.450 cents at 83.250 cents. June hogs closed down 2 cents at 89.350 cents per pound and set a low of 89.050 cents.

Meatpackers slaughtered about 478,000 hogs on Wednesday, down from 479,000 a week ago and 482,000 a year ago, the USDA said.

Still, hog slaughtering numbers have been higher than the USDA's last quarterly Hogs and Pigs report in December would have suggested, Suderman said. The department will issue the next report on March 30.

"Overall, supplies have been there," Suderman said.

CME April live cattle settled 0.125 cent weaker at 162.300 cents per pound. April feeder cattle FCJ3 finished down 0.525 cent at 188.250 cents per pound.

© 2000 - 2024 - Global Ag Media. All Rights Reserved | No part of this site may be reproduced without permission.