Chicago | Reuters — U.S. lean hog futures fell on Wednesday on technical selling and signs that wholesale pork prices may have peaked after a massive run-up due to closings at meat-packing plants as COVID-19 sickened workers, traders said.

The U.S. pork cutout value fell on Tuesday afternoon by nearly $9/cwt, to $112.82, with pork belly values diving by more than $61, according to U.S. Department of Agriculture data (all figures US$). That decline set the tone for Wednesday’s hog futures trade, analysts said, even though the pork cutout firmed a bit on Wednesday, to $114.71/cwt.

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Chicago Mercantile Exchange (CME) June lean hog futures settled down 3.45 cents at 57.875 cents/lb., slipping below its 50-day moving average near 60.9 cents.

The drop in the pork cutout came as the U.S. hog and slaughter pace increased and meat-packing plants came back online. USDA estimated Wednesday’s hog slaughter at 373,000 head, the most since April 23 but still down 18 per cent from a year ago.

Bottlenecks of market-ready hogs and cattle caused by recent closures at meat-packing plants continue to hang over the futures markets.

“Even though slaughter has recovered some, we are still backing up a lot of market hogs,” said Doug Houghton, analyst with Brock Associates.

CME live cattle futures closed lower, retreating after early advances on profit-taking and expectations of easing beef prices.

“Ideas that the beef market is topping out … weighed on cattle futures,” Houghton said, noting that the USDA’s afternoon cutout value for choice beef was down $9.40 at $465.99 per cwt, its first daily decline in more than a month.

CME June live cattle futures settled down 3.3 cents at 93.875 cents/lb., turning down after the contract climbed to 98.85 cents, its highest since March 25. CME August feeder cattle settled down 2.675 cents at 133.075 cents.

“We’ve come a long ways off the lows in hogs and cattle (futures), and prices at the retail level have skyrocketed. We will have to see how the consumer reacts to these higher prices,” said Jeff French, analyst with Top Third Ag Marketing.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago.