Chicago | Reuters — Benchmark December lean hog futures on the Chicago Mercantile Exchange fell for a fifth consecutive session on Tuesday, touching a nine-month low as fears of a recession hurting consumer demand for meat triggered another round of long liquidation, traders said.
Sliding prices for cash hogs and wholesale pork added to bearish sentiment along with seasonal pressure.
“The hogs are having a particularly bad week,” said Sterling Smith, director of agricultural research at AgriSompo North America.
“We are coming into the time of year when normally hog supplies typically increase, so you have that working against it.”
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CME October lean hogs settled 1.675 cents lower at 88.7 cents/lb. and benchmark December hogs plunged 3.15 cents to finish at 76.25 cents/lb. after dipping to 76.125 cents, the contract’s lowest since Dec. 23 (all figures US$).
Funds hold a net long position in CBOT hog futures, and open interest has been declining during the market’s five-session slide, an indication of long liquidation.
Meanwhile, the CME Lean Hog Index, a two-day weighted average of cash hog prices, fell to $96.99 per hundredweight (cwt), its lowest since mid-February.
In the wholesale pork market, the U.S. Department of Agriculture priced pork carcasses below $100/cwt for the first time since May 12. Tuesday’s carcass value was $99.01/cwt, down $2.45 from Monday.
Traders await USDA’s Sept. 29 quarterly hogs and pigs report. Analysts surveyed by Reuters on average expect the government to report the U.S. hog herd was 0.8 per cent smaller on Sept. 1 than a year earlier.
In the cattle market, CME October live cattle settled 0.1 cent higher at 143.575 cents/lb. while the most-active December contract fell 0.45 cent to end at 146.9 cents/lb.
CME November feeder cattle settled 0.775 cent lower at 176.275 cents/lb.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago.
