U.S. livestock: Hog futures fall on concerns over supply glut

Chicago | Reuters — Chicago Mercantile Exchange hog futures plunged four per cent on Monday, hitting their lowest level in nearly a month, as robust supplies threatened profits even as pork prices edged off their recent lows, traders said.

Pork processors earned $22.90 per hog, down from $46.25 per hog on Friday and $43.20 a week ago, according to livestock marketing advisory service HedgersEdge (all figures US$).

“Big production plays a role in all of that, with last week’s slaughter total of 2.667 million head our largest yet of the season and a couple more big weeks just ahead of us,” brokerage StoneX said in a note to clients.

CME February lean hogs settled 3.275 cents lower at 78.225 cents/lb. The contract hit its lowest price since Nov. 10.

In the U.S. pork market, the wholesale carcass cutout price added $7.93 to close at $89.30 per hundredweight (cwt), rebounding from the 10-month low hit on Friday, the U.S. Agriculture Department said. Ham prices gained $5.55, to $67.82/cwt, while belly prices rose by $23.48, to $150.78/cwt.

CME February live cattle finished 0.7 cent higher at 139.65 cents/lb. CME January feeder cattle rose 1.125 cents to end at 165.25 cents/lb.

Profit margins for beef processors on Monday fell to $252.25 per head of cattle from $254.35 on Friday and $362.60 a week ago, HedgersEdge said.

— Mark Weinraub is a Reuters commodities correspondent in Chicago.