Chicago | Reuters — Chicago Mercantile Exchange lean hog futures fell sharply for the second day in a row, hitting a four-month low as traders adjusted their expectations for prices to reflect the U.S. government’s bigger-than-expected supply view.
“We simply don’t need the sow base we currently have or need lower prices to clear the increased production we have coming,” brokerage StoneX said in a note to clients.
The benchmark CME December lean hogs futures contract sank 2.275 cents to finish at 69.5 cents/lb. (all figures US$). Prices bottomed out at 69.325 cents, the lowest for the December contract since May 30.
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With harvest underway across the Canadian Prairies rumblings has been felt from the other side of the world, specifically in regards yellow peas. There have been recent media reports stating the Indian government is under growing domestic pressure to end its duty-free period on yellow pea imports.
The U.S. Department of Agriculture last week surprised analysts by reporting the average pigs saved per litter reached 11.61 for the June-August period, up about 4.3 per cent from a year earlier. That was above the highest estimate from analysts surveyed by Reuters, who on average expected a two per cent increase.
Since the report was released, hog futures have sank nearly eight per cent.
In CME’s cattle markets, most-active November feeders gained 0.8 cent, to 255.7 cents/lb. December live cattle rose 0.425 cent, to 188.35 cents/lb.
— Reporting for Reuters by Mark Weinraub in Chicago.
