U.S. lean hog futures sank by their daily exchange-imposed trading limit on Thursday as profit-taking overwhelmed the market following blistering rallies, analysts said.
The setback is a turnaround from gains that have lifted profits for pig farmers after they struggled last year when the COVID-19 pandemic reduced restaurants’ demand for meat and temporarily closed slaughterhouses.
The May, June, July and August hog futures contracts ended down the 3-cent limit, after all but August futures set contract highs on Monday.
The benchmark June futures contract settled on Thursday at 104.700 cents per lb at the Chicago Mercantile Exchange (CME). The contract is still up 26% percent from the start of the year.
CME will temporarily expand daily trading limits to 4.5 cents on Friday.
Weekly U.S. pork export sales reported on Thursday were also poor.
The U.S. Department of Agriculture said sales for delivery in 2021 fell to 17,200 tonnes in the week ended on April 8, a marketing-year low. That was down 48% from the previous week and 60% from the prior four-week average.
Traders said weekly U.S. beef export sales were also disappointing at 15,700 tonnes. That was down 14% from the previous week and 23% from the prior four-week average, according to the USDA.
CME June live cattle ended 0.400 cent lower at 119.650 cents per pound. May feeder cattle futures fell 1 cent to 144.425 cents per pound, hitting their lowest price since May 19.
Beef processor Cargill said a plant in Dodge City, Kansas, slaughtered about 4,600 cattle on Thursday, down about 11.5% from normal. A day earlier, the company said the facility had suffered technical problems with an automated shipping system.
Operations should return to normal on Monday, according to Cargill.
Overall, U.S. meat processors slaughtered 114,000 cattle on Thursday, down from 119,000 cattle a week earlier, and 479,000 hogs, down from 492,000 hogs a week ago, according to USDA.