28 September 2022

2 minute read

North America

Benchmark December lean hog futures on the Chicago Mercantile Exchange (CME) 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, Reuters reported, citing traders.

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," Smith added.

CME October lean hogs settled 1.675 cents lower at 88.700 cents per lb and benchmark December hogs plunged 3.150 cents to finish at 76.250 cents per lb after dipping to 76.125 cents, the contract's lowest since December 23.

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 US Department of Agriculture (USDA) priced pork carcasses below $100 per cwt for the first time since May 12. Tuesday's carcass value was $99.01 per cwt, down $2.45 from Monday.

Traders await the USDA's September 29 quarterly hogs and pigs report. Analysts surveyed by Reuters on average expect the government to report the US hog herd was 0.8% smaller on September 1 than a year earlier.

In the cattle market, CME October live cattle settled 0.100 cent higher at 143.575 cents per lb while the most-active December contract fell 0.450 cent to end at 146.900 cents per lb.

CME November feeder cattle settled 0.775 cent lower at 176.275 cents per lb.

Source: Reuters