Chicago | Reuters — Chicago Mercantile Exchange hog futures ended lower on Tuesday, weighed down by concerns that unseasonably cool midsummer weather will persist into the fall and boost supply by putting weight on hogs quicker, traders and analysts said.
Hog weights have declined modestly so far this summer, but remain well above last year’s levels which has limited the loss of millions of hogs caused by the deadly pig virus.
“We’re going to see the expansion in weights stay larger and longer than we think, and compensate for the down tonnage,” said U.S. Commodities Inc analyst Don Roose, recapping market concerns.
Currently, adequate numbers of heavy hogs pressured prices for slaughter-ready animals while pumping more pork into retail channels.
The government’s morning direct hog price data was unavailable. Hog prices in the Midwest on Tuesday morning were steady to down $2 per hundredweight (cwt) lower than on Monday, hog dealers said.
The morning’s wholesale pork price was at $127.16/cwt, 66 cents lower than Monday, the U.S. Department of Agriculture said.
August and October futures slid to near-four month lows after triggering sell stops. Funds sold the December contract after it returned below the 100-day moving average of 94.86 cents.
Bargain hunters may again attempt to probe the market for a bottom on Wednesday, traders said.
August closed down 1.225 cents per pound to 115.85 cents, and October 1.95 cents lower at 101.675 cents.
Cattle end mostly weak
CME live cattle closed mostly weak pressured by profit-taking, with the August contract supported by its discount to last week’s prices for slaughter-ready, or cash, cattle.
August live cattle closed up 0.225 cent/lb. to 158.45. October ended 0.575 cent lower at 155.65 cents and December finished down 0.425 cent at 155.9.
Last week, cash cattle in the U.S. Plains moved at mostly $162 to $164/cwt, steady to down $2 from the week before.
Investors look for cash to trade steady or weak as some packers draw from animals that were contracted against the futures market.
While more cattle available for sale in Nebraska may pressure cash prices, fewer animals in Texas and Kansas might underpin cash returns in both states.
CME feeder cattle closed mixed, supported by higher cash feeder cattle prices but pressured by weak back-month live cattle futures.
August finished up 0.275 cent/lb to 221.25, and September up 0.05 cent to 220.725 cents. October closed 0.3 cent lower at 220.05 cents, and November at 218.15 cents, down 0.375.
— Theopolis Waters reports on livestock futures markets for Reuters from Chicago.