CHICAGO (Reuters) — Chicago Mercantile Exchange hog futures on Wednesday posted losses for a second straight day, pressured by eroding cash hog and wholesale prices.
October ended down 2.325 cents at 92.500 cents per lb, and December at 86.425 cents, 2.200 lower.
Wednesday afternoon’s average price of hogs in Iowa/Minnesota slumped $2.83 per hundredweight (cwt) from Tuesday to $96.68, the U.S. Department of Agriculture said.
Separate USDA data showed the afternoon wholesale pork price down $2.41 cents per cwt from Tuesday to $107.25.
“Farmers are selling hogs while trying to get ahead of this down market, which lightened up weights,” an Iowa hog dealer said.
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Currently there are enough hogs to meet packer demand while making more pork available to supermarkets, hog dealers said.
Some retailers are waiting for further pork price cuts before booking significant amounts of product to feature for Labour Day, said traders and analysts.
Speculators sold deferred trading months in the belief that cheaper corn will cause livestock producers to expand herds and continue to feed animals to heavier weights.
CME live cattle closed lower, weighed down by sluggish beef demand that threatens to keep a lid on prices for market-ready or cash cattle.
August live cattle ended 1.250 cents per lb lower at 149.250, and October down 1.825 cents at 145.400 cents.
Wednesday afternoon’s choice wholesale beef price fell $1.36 per cwt from Tuesday at $251.55. Select dropped 84 cents to $243.07, the USDA said.
Cash cattle bids surfaced in Kansas and Nebraska at $151 to $152 per cwt, with no response from sellers, feedlot sources said. Last week, cash cattle in the U.S. Plains moved at mostly $155 to $156.
Retailers are buying beef hand-to-mouth at current prices while watching pork costs edge downward, a trader said.
Some packers are thought to have ample inventories, with the possibility of a seasonal buildup in supplies looming. But, others might be strapped for cattle needed to make good on meat orders for the Labour Day holiday.
Futures’ losses mounted after funds liquidated long positions, especially after the October contract fell below the 100-day moving average of 146.87 cents.
USDA on Friday will issue the monthly Cattle-On-Feed report.
Analysts expect the data to show cattle placed in feedlots in July slowed down due to pricey calves that discouraged some feedyards from buying them.
CME feeder cattle closed sharply lower, with back months down the maximum 3.000-cents daily price limit, on fund selling and live cattle futures losses.
August closed down 2.200 cents per lb at 214.950 cents. September and October finished 3.000 cents lower at 211.250 and 210.375 cents.
