US August feeder cattle futures fall 0.775 cent - CME

Hog futures drop to further contract lows
calendar icon 29 May 2023
clock icon 2 minute read

Chicago Mercantile Exchange (CME) hog futures dropped to contract lows again on Friday, as poor demand for US pork continued to depress prices, reported Reuters.

The losses heap more pain on producers who have struggled with weak prices for pigs and high costs for expenses like livestock feed and labour.

"Producers are losing their rear ends," said Dan Norcini, an independent livestock trader.

CME lean hogs for June delivery ended down 1.575 cents at 76.075 cents per pound, after touching a contract low of 75.45 cents per pound.

Most-active July hogs closed 2.475 cents weaker at 74.775 cents per pound and set a contract low of 74.025 cents per pound. The contract lost about 10% this week and is down about 32% this year.

Markets will be closed on Monday, as consumers celebrate the Memorial Day holiday in the US, typically the kickoff to the summer grilling season.

Retail pork prices remain too high to increase demand from consumers, Norcini said. Small-time and independent farmers may quit the industry unless demand improves, he said.

"Grocers must start to feature pork aggressively or we are not going to have anything left except the big boys," Norcini said.

Some major companies are already reducing operations in North America.

Canada's Olymel, one of the country's biggest pork processors, said it will slash its western sow herd by 30% to 40,000 sows in production.

The closure of sow farms will result in a net reduction of about 200,000 market hogs annually to a slaughter plant in Red Deer, Alberta, from company-owned farms, Olymel said. The impact will be felt in 2024 at the earliest.

In other markets, most-active August live cattle futures rose 0.400 cent to 165.175 cents.

August feeder cattle futures fell 0.775 cent to finish at 233.925 cents per pound. A rally in corn futures pressured feeder cattle by signaling that costs for livestock feed may rise further, traders said.

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