28 June 2024

2 minute read

By: Global Ag Media

North America

Chicago Mercantile Exchange (CME) lean hog futures turned lower on Thursday, ahead of a quarterly government report that many traders had predicted would show that US farmers had a slightly larger hog herd, Reuters reported, citing traders.

Hog futures pared Wednesday's gains after wholesale pork prices retreated. The US Department of Agriculture's (USDA) mid-morning pork report on Thursday showed carcass prices were lower.

Prices continued to slump in the USDA's afternoon report, with carcasses priced at $94.90 per hundredweight (cwt), down 62 cents from a day earlier, and as ribs tumbled $8.88 per cwt and pork bellies fell $2.69 per cwt.

After the market closed, the USDA reported in its quarterly hogs and pigs report that the U.S. hog herd as of June 1 was 1% larger than a year earlier - slightly above trade expectations. The report also said there was a larger number of pigs per litter in the March-May period, despite the fact that farmers bred 3% fewer sows.

"For producers, it's nirvana. But for the market, it means there are just too many slaughter-ready pigs for the current level of demand," said independent livestock trader Dan Norcini.

On Thursday, most-active CME August hogs settled down 0.875 cent to 88.100 cents per pound. July hogs closed 0.450 cent lower at 89.450 cents per pound.

CME cattle futures also turned lower on profit taking from the recent rally, where prices had bounced off two-month lows when cash prices declined less than expected, analysts said.

Traders and producers have been closely tracking the cash cattle market to see whether it would crumble after futures recently came under pressure from fund selling, larger-than-expected US feedlot placements in February and concerns over detections of avian flu in dairy herds.

CME August live cattle settled 0.300 cent lower at 186.450 cents per pound. CME August feeder cattle ended down 1.125 cents to 260.650 cents per pound.