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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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.
