CME Group lean hog futures fell on Monday, as worries about the U.S. economy and a seasonal slowdown in meat demand signaled declining pork demand, traders said.
CME most-active August lean hog futures settled down 1.900 cents at 104.875 cents per pound. Front-month July hogs fell 0.750 cent to 110.175 cents.
Wholesale pork and beef prices tend to slide during this time of the year, as retailers finish stocking their meat cases for the Fourth of July weekend, and the next big grilling holiday isn’t until Labor Day in early September.
Belt-tightening by consumers remains a concern as well.
“Demand right now looks iffy,” said Dan Norcini, an independent livestock trader. “Consumers are strapped. Because of high gasoline prices, they don’t have a lot of money left in their paycheck to go out and buy high-priced cuts of meat.”
Wholesale pork prices fell after rising on Friday. U.S. pork carcasses were priced at $109.03 per cwt, down $3.17 from Friday, the U.S. Department of Agriculture (USDA) said.
Traders were positioning for the USDA’s quarterly Hogs and Pigs report due Wednesday. Analysts surveyed by Reuters on average expect the government to show the U.S. June 1 hog herd down 0.7%, compared with a year earlier.
CME live cattle futures closed higher after a choppy session. Benchmark August live cattle futures settled up 0.100 cent at 133.475 cents per pound, bouncing after a dip to 132.350 cents, the contract’s lowest since June 1.
The spot June contract, which expires on Thursday, rose 0.900 cent to finish at 136.250 cents.
Cash cattle markets sent inconsistent signals. Beef packers last week paid about $145 per hundredweight for slaughter-ready cattle in Nebraska, while farther south, packers in Kansas and Texas, paid around $138, an unusually wide discrepancy.
“How do you peg cash cattle prices when there is such a big variance between what packers are paying? Nobody feels confident,” Norcini said.
CME August feeder cattle settled up 1.625 cents at 174.125 cents per pound, supported by a drop in corn futures that indicated cheaper feed costs.