Chicago | Reuters — Lean hog futures on the Chicago Mercantile Exchange fell to life-of-contract lows on Friday and cattle futures also retreated, pressured by technical selling and worries that a slowing global economy could hurt demand for meat, traders said.
Hog futures fell the most, with the benchmark December contract settling down two cents, or 2.9 per cent, at 66 cents/lb. after setting a contract low of 65.4 cents (all figures US$). The February, April and May hog contracts hit contract lows as well.
“I think you just had a bunch of selling tied to fears of recession coming… and possibly that’s going to affect meat consumption. So (traders) are worried about the demand side of the equation,” said Dan Norcini, an independent trader.
Read Also
U.S. grains: Wheat futures rise on supply snags in top-exporter Russia
U.S. wheat futures closed higher on Thursday on concerns over the limited availability of supplies for export in Russia, analysts said.
U.S. equity markets ended sharply lower for the day and week as investors worried about more interest rate hikes and the Israel-Hamas conflict spreading.
Hog traders shrugged off support from an uptick in wholesale pork prices, and the fact that December hog futures are trading at a hefty discount to cash prices. The CME’s Lean Hog Index, a two-day weighted average of cash prices, was last quoted at 80.45 cents/lb.
The U.S. Department of Agriculture (USDA) quoted the wholesale pork carcass cutout late Friday at $87.97 per hundredweight (cwt), up $0.84 from Thursday’s 4-1/2 month low of $87.13.
Cattle futures followed the weak trend seen in hog, grain and equity markets. CME December live cattle futures settled down 0.675 cent at 184.625 cents/lb.
November feeder cattle futures fell 2.275 cents to finish at 242.225 cents/lb. and most-active January feeders ended down 2.325 cents at 243.05 cents/lb.
After the close of the market, USDA reported the number of cattle in U.S. feedlots on Oct. 1 at 100.6 per cent of a year ago, while analysts surveyed by Reuters on average had expected a slight reduction of 99.7 per cent of year-ago.
USDA said cattle placements into feedlots during September were 106 per cent of a year ago, while analysts on average expected placements at only 100.8 per cent. Cattle marketings during September were 89.4 per cent of a year ago, below the average estimate of 90.3 per cent.
Traders said USDA’s figures were bearish and could pressure CME cattle futures on Monday.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago.
