Chicago | Reuters – Chicago Mercantile Exchange lean hog futures fell to their lowest prices in more than a week on Thursday in a setback from recent rallies, traders said.
Live cattle futures also ended lower after the February contract LCF3 set a new high.
The hog and cattle markets were overbought and due for corrections, traders said.
December lean hog futures LHZ2 sank 3.375 cents to close at 85.125 cents per lb and touched their lowest price since Oct. 18 at 84.675 cents per lb. February hogs LHG3 slid 2.850 cents to close at 88.150 cents per lb and hit their lowest price since Oct. 19 at 87.775 cents.
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U.S. livestock: Feeder cattle extend rally to new highs
Chicago Mercantile Exchange feeder cattle futures extended gains to record highs on Wednesday while live cattle futures set a contract high before pulling back.
An increase in pork inventories in cold storage is acting as an anchor for the hog market, a broker said.
The U.S. Department of Agriculture on Monday reported total pork supplies in cold-storage facilities at the end of September were up 14% from a year earlier. Total supplies of frozen beef were 19 per cent higher.
In the beef market, December live cattle LCZ2 ended 0.150 cent lower at 153.425 cents per lb. The contract has climbed more than 5% since hitting a 10-week low on Sept. 29. February live cattle LCG3 closed down 0.175 cent at 156.850 cents after touching a contract high of 157.225 cents.
Gains in the cattle market have encouraged more short hedging by producers, broker StoneX said in a note.
“We have seen an uptick in new selling across our desk and the industry,” StoneX said.
CME November feeder cattle FCX2 ended 0.700 cent lower at 178.125 cents per lb, and January feeders FCF3 slipped 0.800 cent to 180.450 cents per lb.
Choice cuts of boxed beef fell by $1.63 to $262.49 per cwt, while select cuts jumped by $3.31 to $231.91 per cwt, according to the U.S. Department of Agriculture.
