US hog futures hover near two-year lows - CME
Live cattle futures ended narrowly mixed
19 January 2023
2 minute read
By: Chicago Mercantile Exchange (CME) lean hog futures fell on Wednesday as cash hog prices remained soft and wholesale pork prices lingered near two-year lows, Reuters reported, citing traders.
"We continue to search for a bottom on the hogs, and the cash market stays under pressure," said Don Roose, president of Iowa-based US Commodities. "It's slow demand on the export front, and the domestic demand can't seem to grab hold," Roose said.
CME February lean hog futures settled Wednesday down 1.125 cents at 77.325 cents per pound and most-active April futures fell 1.925 cents at 86.200 cents per pound.
The US Department of Agriculture (USDA) said the pork carcass cutout dipped to $77.44 per hundredweight (cwt) on Tuesday, the lowest reading since mid-January 2021, before inching up to $77.89 on Wednesday afternoon.
The CME Lean Hog Index, a two-day weighted average of cash hog prices, fell to $74.18 per cwt, its lowest in a year.
Meanwhile, demand from China, a significant buyer of US pork, has stalled as the Asian nation struggles with excess supplies. China's agriculture ministry on Wednesday urged farmers to take measures to reduce pork output, which hit an eight-year high in 2022.
CME live cattle futures ended narrowly mixed, consolidating a day after the front two contracts fell to four-week lows. February live cattle settled down 0.200 cent at 156.800 cents per pound while April futures finished up 0.125 cent at 160.225 cents.
CME March feeder cattle futures ended up 0.425 cent at 181.725 cents per pound.
Wholesale beef prices declined. Choice cuts were priced at $274.08, down $2.58 from Tuesday, while select cuts fell 67 cents to $253.86 per cwt, the USDA said.
Brokers await the USDA's monthly Cattle on Feed report on Friday. Analysts surveyed by Reuters on average expected the government to report the number of cattle in US feedlots as of Jan. 1 at 11.652 million head, down 3.2% from a year ago. Analysts on average estimated feedlot placements in December at 1.784 million head, down 9% from a year ago.
