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CME update: lean hog futures close mixed as slaughter pace ramps up

Hog futures were mixed on 2 June as the rising hog slaughter pace puts pressure on wholesale pork prices.

3 June 2020, at 9:14am

Reuters reports that the front two CME contracts declined on Tuesday. June lean hogs ended down 2.200 cents at 54.000 cents per pound. Most-active July futures closed lower at 54.875 cents – a 0.275 cent decline. Back months ended higher.

The USDA reported the US pork cutout down $6.67 at $74.37 per cwt on Tuesday afternoon.

Currently, US slaughterhouses are processing a backlog of hogs and cattle that built up in the last two months as COVID-19 outbreaks sickened slaughterhouse workers. The spate of illnesses forced numerous meat plants to close.

"The slaughter numbers have come back much faster than the industry anticipated. [Meat] packers have done a great job getting everybody back to work and working through these animals," said Jeff French, analyst with Top Third Ag Marketing in Chicago.

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