Chicago | Reuters—Chicago Mercantile Exchange lean hog futures dropped on Wednesday, as traders booked profits following recent gains and as pork cutout prices tumbled.
Feeder cattle futures also weakened, while live cattle rose.
Profit-taking dragged down hog futures after the market neared a contract high on Tuesday, brokers said.
Strong cash prices have recently supported futures, as traders expressed relief that U.S. pork exports have not yet been hurt by President Donald Trump’s plans to impose tariffs on trading partners.
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Most-active CME April lean hog futures LHJ25 ended down 3.45 cents to finish at 89.75 cents per pound, after hitting their lowest price in more than two weeks earlier in the day.
The U.S. Department of Agriculture quoted the wholesale pork carcass cutout at $95.22 per hundredweight late on Wednesday, down $3.95 from Tuesday. Belly values sank by $16.75 per hundredweight.
In CME’s beef markets, feeder cattle futures faced pressure from corn prices Cv1 hitting a 16-month high, signaling that livestock producers will face higher costs for animal feed, brokers said.
Some hog producers are already replacing high-priced corn with wheat in feed rations, one broker said.
Concerns about supply disruptions for cattle also evaporated, after the U.S. Department of Agriculture said following the end of Tuesday’s trading session that it would not block imports from Mexico over the latest discovery of a pest there.
Feeder cattle jumped on Tuesday as some traders expected that USDA may suspend imports from Mexico due to the latest discovery of New world screwworm in a cow.
CME March feeder cattle FCH25 fell 0.7 cent to end at 269.025 cents per pound on Wednesday, after rising earlier to a two-week high.
Meanwhile, April live cattle futures LCJ25 closed up 0.75 cent at 194.775 cents per pound. The market recovered after falling on Tuesday to its lowest price since December 30.
Analysts expect a monthly USDA report on Friday will show that placements of cattle into U.S. feedlots in January rose 2.2 per cent from the previous year, according to a Reuters poll.
