Profit-taking weighed on Chicago Mercantile Exchange lean hog futures on Tuesday after prices leapt to their highest price this month, traders said.
Most-active June lean hogs settled down 1.075 cents at 121.325 cents per pound. The contract is up 8% since nearing a one-month low on April 5 and 24% this year.
U.S. pork cutout values also weakened. Carcasses were priced at $107.12 per cwt, down $2.37 from Monday, while pork belly values sank by $11.46 to $182.26 per cwt, the U.S. Department of Agriculture said.
Weaker cutout values could temper retail pork prices as consumers prepare for the summer grilling season, analysts said.
U.S. pork producers are hoping for strong domestic sales amid flagging demand to China, the world’s top pork consumer. China has boosted its pork production after an outbreak of African swine fever devasted Chinese herds starting in 2018.
China’s pork imports from all sources fell by 64% in the first three months of 2022, compared to the same period last year, to 420,000 tonnes, according to the country’s General Administration of Customs.
China will buy 40,000 tonnes of frozen pork for its state reserves on Friday in its fifth batch of such stockpiling this year, the China Merchandise Reserve Management Center said.
China will also auction 3,000 tonnes of frozen beef and mutton from its state reserves on Thursday, the center said.
In U.S. beef markets, CME June live cattle futures rose 0.775 cent to 136.575 cents per pound. May feeder cattle futures jumped 1.625 cents to 160.775 cents per pound.
Boxed beef prices fell by 1.15 cent for choice cuts to $269.93 and slipped by $0.25 to $259.21 per cwt for select cuts, the USDA said.
On Friday, the USDA will issue a monthly Cattle on Feed report that is expected to show placements in March fell 7.8% from a year earlier and marketings dropped 1.8%, according to a Reuters survey of analysts.