Chicago | Reuters — Chicago Mercantile Exchange lean hog futures fell 2.9 per cent to their lowest level in nearly three weeks on Tuesday, with concerns about demand from top buyers in focus amid a record-large supply in the U.S., traders said.
The market shrugged off a U.S. Agriculture Department report from last week that showed large pork purchases by China and Mexico.
Tariffs on U.S. exports to both of those countries and few signs of a resolution to trade spats in the near future continued to hang over the market, said Don Roose, president of U.S. Commodities in West Des Moines, Iowa.
“One week does not make a market,” Roose said. “We have seen them buy it and cancel it before. The large supplies are overwhelming the export pace.”
CME June lean hogs closed down 2.45 cents at 83.975 cents/lb. while actively traded July hogs ended 2.25 cents lower at 85.7 cents (all figures US$).
The front-month contract on Tuesday hit its lowest level since May 8.
Live cattle futures were narrowly mixed.
June live cattle rose 0.375 cent to 111.55 cents/lb., and actively traded August eased 0.175 cent to 107.775 cents.
August feeder cattle finished down one cent at 142.225 cents/lb. and September feeders fell 1.2 cents, to 142.675 cents.
USDA on Friday afternoon said that all cattle on feed as of May 1 were 102.2 per cent of the year-ago total. Analysts had been expecting 102.9 per cent.
April placements were 108.7 per cent compared to trade estimates for 113 per cent, and marketings were 106.9 per cent compared to traded estimates for 106.6 per cent.
Like the hog markets, concerns about export demand kept a lid on any potential buying opportunities stemming from a supportive report, Roose said.
Domestic demand for both pork and beef has been weak due to rainy weather that has limited opportunities for outdoor grilling. The unofficial kickoff to summer grilling, Memorial Day weekend, was marred by storms across much of the U.S.
— Mark Weinraub is a Reuters commodities correspondent in Chicago.