December 7, 2021

US hog futures decline on concerns about supply glut

Chicago Mercantile Exchange hog futures plunged 4% on December 6, hitting their lowest level in nearly a month, as robust supplies threatened profits even as pork prices edged off their recent lows, traders said.

Pork processors earned US$22.90 per hog, down from US$46.25 per hog on December 3 and US$43.20 a week ago, according to livestock marketing advisory service HedgersEdge.

"Big production plays a role in all of that, with last week's slaughter total of 2.667 million head our largest yet of the season and a couple more big weeks just ahead of us," brokerage StoneX said in a note to clients.

CME February lean hogs settled 3.275 cents lower at 78.225 cents per pound. The contract hit its lowest price since November 10.

In the US pork market, the wholesale carcass cutout price added US$7.93 to close at US$89.30 per hundredweight (cwt), rebounding from the 10-month low hit on December 3, the United States Agriculture Department said. Ham prices gained US$5.55 to US$67.82 per cwt, while belly prices rose by US$23.48 to US$150.78 per cwt.

CME February live cattle finished 0.7 cent higher at 139.65 cents per pound. CME January feeder cattle rose 1.125 cents to end at 165.25 cents per pound.

Profit margins for beef processors on December 6 fell to US$252.25 per head of cattle from $254.35 on December 3 and US$362.60 a week ago, HedgersEdge said.

- Reuters