Chicago | Reuters — U.S. lean hog futures were mostly about two per cent lower on Thursday, easing on technical selling and investment fund liquidation, traders and analysts said.
Hog futures fell sharply to their session lows at 10:10 a.m. CT in what two traders called a “flash crash,” before prices recouped a portion of their losses.
“We saw the market dip $2 (per cwt) in a matter of seconds,” said Top Third Ag Marketing broker Craig VanDyke, adding that the move likely was tied to automated selling.
Chicago Mercantile Exchange July hogs fell 0.525 cents to 82.05 cents/lb., settling above the contract’s session low of 80.725 cents. August hogs dropped 1.475 cents, to 78.925 cents.
U.S. Department of Agriculture data showing a downturn in U.S. weekly pork export sales were seen as bearish but prices for cash hogs and wholesale pork have been trending higher, buoying futures.
USDA after the close of trading said hogs in the top cash markets of Iowa and southern Minnesota were up $1.03, to $81.58/cwt.
CME live cattle and feeder cattle futures each fell to the lowest levels in weeks before rebounding. Cattle breached support of several moving averages amid lower prices for cash cattle and declines in beef.
“It’s hard to be long when you are waking up to negative news every day,” said Kevin Bost, president of Procurement Strategies Inc. “I think you have about five or six weeks of falling beef prices and falling cattle prices.”
Small numbers of cash cattle fetched $130-$134/cwt in the U.S. Plains this week, down as much as $7 from a week ago, feedlot sources said.
Cattle and beef often ease in the hottest months of the summer, when consumers cook fewer pricey beef cuts such as roasts, choosing cheaper options such as burgers.
However, the losses in futures may have been too great, prompting bargain buying.
Most-active CME August live cattle eased 0.375 cent to 117.5 cents/lb. while front-month June cattle eased two cents, to 122.5 cents.
CME August feeder cattle climbed 0.95 cent, to 147.075 cents/lb., recovering after earlier sliding to the lowest levels since May 11.
— Michael Hirtzer reports on commodity markets for Reuters from Chicago.