Chicago | Reuters — Chicago Mercantile Exchange lean hog futures rose on Wednesday after the U.S. Department of Agriculture (USDA) said it will allow nine pork processing plants to apply to operate faster line speeds under a pilot program.
The announcement eased concerns that slower processing speeds had slowed meatpackers’ demand for pigs to slaughter, traders said.
Meatpackers were forced to slow processing after a federal judge in March struck down a 2019 rule that removed speed limits on certain plants.
USDA’s new program “possibly removes a potentially bearish situation with slower chain speeds reducing the demand for hogs and causing some backups and weight gains,” said Dan Norcini, an independent livestock trader.
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CME December lean hogs ended up 0.75 cent at 75.7 cents/lb. (all figures US$). Earlier in the session, the contract dropped to its lowest price since Oct. 28 at 73.7.
In CME’s beef markets, December live cattle futures ended 0.2 cent lower at 132 cents/lb., after rising on Monday to their highest since Sept. 3 at 132.5 cents.
The most actively traded January feeder cattle contract fell 1.75 cents to settle at 158.05 cents/lb. The contract on Monday and Tuesday traded up to 160.6, which was the highest price since Oct. 27.
In other news, Brazil’s JBS posted third-quarter net income that exceeded analysts’ expectations on the strength of its U.S. meat business and higher domestic food sales, according to a financial statement on Wednesday.
U.S. meat processor Tyson Foods is set to report quarterly earnings Monday.
— Reporting for Reuters by Tom Polansek and Julie Ingwersen in Chicago.
