Chicago | Reuters—CME lean hog futures LHQ24 closed limit down on Wednesday as a hefty oversupply and weak demand from consumers dragged futures lower, traders said.
Meanwhile, live and feeder cattle futures also sank on a seasonal dip in futures prices and a drop in consumer demand following the end of major steak-eating holidays.
A cooling job market, high interest rates and lingering inflation have made consumers reluctant to buy pricier meat at the same time that the U.S. is facing an oversupply of hogs, traders said.
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“Hogs are becoming a train wreck,” Dan Norcini, an independent trader said. “Usually, wholesale prices are strong in the summer, but this summer has been a total dud.”
Pork carcass cutout prices have been dropping since early June in response to depressed consumer demand, while commodity fund selling has also pressured livestock futures.
CME August lean hog futures LHQ24 settled down 3.725 cents at 84.675 cents per pound at its limit down. October lean hog futures LHV24 – which set a new contract low for the third day in a row – ended down 2.45 cents at 68.325 cents per pound.
The CME August live cattle contract LCQ24 settled down 0.1 cent at 182.25 cents per pound. CME August feeders FCQ24 finished down 1.375 cents at 254.35 cents per pound.
“There’s a slackening of demand and falling prices,” Norcini said.
Wholesale boxed beef prices turned lower. The choice boxed beef cutout price was down $1.61 at $324.05 per hundredweight (cwt) on Wednesday, while select was down $0.37 at $303.94 per cwt, according to data from the U.S. Department of Agriculture.
