Chicago | Reuters — Chicago Mercantile Exchange lean hog futures fell on Wednesday for the ninth time in 10 sessions as weak cash hog prices and lower pork values dragged the market to a fresh three-month low, traders said.
Pork packer margins have eroded and the closely followed cash wholesale pork cutout value fell on Wednesday to the lowest level in nearly two years.
“The anchor on the hogs is the premium in the futures market to the (CME lean hog) index and the fact that we haven’t been able to put in a cash low yet,” said Don Roose, president of U.S. Commodities.
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The U.S. Department of Agriculture (USDA) quoted the pork cutout at $80.68/cwt on Wednesday, down $1.05 from the prior day and lowest since Feb. 3, 2021 (all figures US$).
The average pork packer margin on Wednesday was estimated at just $5.80 per head, down from $11.10 a week ago, according to marketing advisory service HedgersEdge.com.
CME February lean hogs ended 0.5 cent lower at 79.3 cents/lb. The benchmark contract fell to a low of 78.825 cents during the session, the lowest since Oct. 5.
Live cattle futures were flat to lower as beef prices eased and traders waited for weekly cash trading to develop.
Some traders also moved to the sidelines as they awaited the release of Thursday’s USDA crop supply and demand report, which could impact livestock markets by triggering sharp moves in corn feed prices.
February live cattle ended unchanged for a second straight session at 157.75 cents/lb. while April futures were down 0.135 cent at 161.325 cents. March feeder cattle futures fell 0.95 cent to 185.55 cents/lb.
— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago.
