US cattle markets rebound - CME
Lean hogs drop by maximum daily trading limit
17 March 2023
2 minute read
By: Chicago Mercantile Exchange (CME) lean hog futures sank by the maximum daily trading limit on Thursday on rumours about a potential outbreak of a fatal pig disease which the US government later said were untrue, reported Reuters.
Unsubstantiated chatter about a US case of African swine fever swirled in the market, but the US Department of Agriculture told Reuters it was a rumour and the agency had not heard anything about even a suspected case.
CME April lean hogs finished down 4.3 cents at 79.450 cents per pound and set their lowest price since October 2021. The nearby contract has dropped 9% from its closing price on Friday.
June hogs dropped by the daily limit of 4.75 cents to 93.475 cents per pound and hit their lowest price since January 2022. The daily trading limit will temporarily expand to 7 cents on Friday, according to exchange operator CME Group.
The losses were a "total technical meltdown," said Dennis Smith, commodity broker analyst at Archer Financial Services.
"There's no explanation for the charts coming totally unglued," he said.
Concerns about reduced demand for US hams from Mexico, a top market for American pork, loomed over the hog market due to strength in the US dollar, traders said.
Mexico's peso has been volatile in recent days, sliding around 3% against its US counterpart in the last week as traders flocked to the safe-haven dollar.
Pork cutout values for hams slid by $6.00 to $76.13 per hundredweight (cwt), after tumbling by $6.34 on Wednesday, the US Department of Agriculture said. The pork carcass cutout fell by $1.89 to $84.49 per hundredweight.
In the cattle markets, spillover support from rising equities helped support a rebound in futures prices, traders said.
CME April live cattle LCJ3 ended 0.800 cent higher at 162.350 cents per pound. April feeder cattle finished 1.9 cents higher at 195.150 cents per pound.
