Lean hog futures ease - CME
"It seems like we've hit the wall for pork prices." - economist
8 April 2022
2 minute read
By: Live cattle futures on the Chicago Mercantile Exchange (CME) fell on Thursday, pressured by ample cattle supplies that offer little incentive for packers to bid up the cash market, reported Reuters.
"The supply of market ready cattle is a little less than last year, but it's still plentiful. It just doesn't seem like the market is worried that we’re going to run out of cattle," said Altin Kalo, economist at Steiner Consulting Group.
The nearby April live cattle contract firmed 0.300 cent to 138 cents per pound, better aligning with cash cattle prices, while the most-active June contract, eased 1.250 cents to 134 cents per pound.
May feeder cattle futures ended 0.475 cent lower at 159.475 cents per pound.
Cash cattle traded steady to lower in the Southern US Plains, around $137 to $138 per cwt, according to the US Department of Agriculture, while the Northern Plains saw $138 to$140 per cwt.
Ample processing has kept supply in check, with 124,000 head of cattle processed on Thursday, 4,000 more than the same period a year earlier.
Much of the oversupply has come from farmer efforts to reduce herd as grazing pastures dry up in the western plains.
"Those drought pressures have been a factor, and have contributed to more heiffers going into feedlots," said Kalo.
Boxed beef prices firmed, with choice cuts adding 36 cents to $271.40 per cwt, while select cuts gained 17 cents to $261.22.
Meanwhile, CME lean hog futures eased, pressured by flat cutout values, even as seasonal trends point toward increased pork demand.
"The market was starting to get more optimistic about summer prices," said Kalo. "But the last month or so, it seems like we've hit the wall for pork prices."
CME nearby April lean hogs LHJ2 firmed 0.300 cent to 99.050 cents per pound, while the benchmark June contract eased 0.550 cent to 114.150 cents per pound.
Hog processors slaughtered 479,000 head, 11,000 below the same day last year.
The CME's Lean Hog Index, a two-day weighted average of cash hog prices, fell 58 cents to $101.08 cents per pound.
