U.S. livestock: CME lean hogs fall, cattle up on technical trading, profit-taking

Hogs 'stretched out technically last week'

CME December 2020 lean hogs with Bollinger (20,2) bands. (Barchart)

Chicago | Reuters — U.S. lean hog futures slid on Monday on technical selling and profit-taking, as the trade began to question whether Chinese demand for U.S. pork will boom after rival supplier Germany confirmed a single case of African swine fever in a wild boar.

U.S. pork packer margins eased but still were solid, analysts said. Meanwhile, both supplies and the cash market tightened, and kill-rates at plants remained strong.

Profit margins for meatpackers on Monday were $38.95 per hog, though a week-earlier price was not available due to the Labour Day holiday, according to Denver-based livestock marketing advisory service HedgersEdge.com (all figures US$). On Friday, profit margins for meat packers were $44.05 per hog.

“The hog futures were extremely stretched out technically last week, so prices are slingshotting back,” said Don Roose, president of U.S. Commodities in West Des Moines, Iowa.

China banned pork imports from Germany on Saturday after it confirmed its first case of African swine fever last week, in a move set to hit German producers and push up global prices as China’s meat supplies tighten.

South Korea has also banned German pork.

Now, German exports of pork to non-European countries have essentially been halted, a spokeswoman for the agriculture ministry said on Monday. Overall expectations for stronger beef demand for export and domestic use helped push cattle futures up on technical trading on Monday, said Arlan Suderman, chief commodities economist for StoneX.

Chicago Mercantile Exchange (CME) October lean hog futures settled down 1.95 cents at 64.625 cents/lb. Most actively traded CME December hogs ended down 2.425 cents at 63.575 cents/lb.

CME October live cattle futures settled up 1.35 cents at 106.875 cents/lb., while October feeder cattle ended up 2.025 cents at 142.6 cents/lb.

— P.J. Huffstutter reports on agriculture and agribusiness for Reuters from Chicago.

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