Chicago | Reuters — Chicago Mercantile Exchange cattle and hog futures closed stronger on Wednesday as the livestock markets recovered from losses in the previous session that were linked to fears of a global economic recession, traders said.
Wall Street also finished higher, after broad declines in equities and commodities on Tuesday spilled over into livestock markets.
Cattle futures in particular are linked to the moves in the stock market because economic slumps can reduce consumer demand for beef, analysts said.
CME’s benchmark August live cattle contract settled up 1.575 cents at 134.5 cents/lb. (all figures US$). August feeder cattle rose 0.6 cent to settle at 173.3 cents/lb.
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August hogs finished 3.25 cents higher at 109.2 cents/lb.
USDA quoted the pork carcass cutout value at $111.50/cwt, down about $3 from Tuesday.
Profit margins for pork processors improved to $25.35 per hog from $23.05 on Tuesday, HedgersEdge.com said. That was down from $43.05 a week ago.
In China, the world’s top pork producer and consumer, the most-active live hog futures contract closed down 4.7 per cent in the biggest daily decline since the contract launched.
Chinese hog prices have surged over the last two months, as a reduction in the breeding herd that began last year started to impact output. The market trend reversed sharply on Wednesday, after the National Development and Reform Commission said it will step up supervision of prices.
Analysts said that U.S. traders need to watch China’s demand for imported soybeans used for feed to determine the health of the Chinese hog industry.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.
