CME Group lean hog futures on Tuesday dropped to their lowest prices since January on technical selling and concerns about risks to demand for U.S. meat, brokers said.
American pork exports to China have tumbled this year as Chinese producers rebuild their herds after outbreaks of the pig disease African swine fever. The virus, first detected in China in 2018, slashed pig and pork output in the world’s top market.
U.S. analysts said there are also concerns about inflation threatening domestic demand.
Benchmark June lean hogs slid 2.775 cents to 102.200 cents per pound and touched their lowest price since Jan. 19. July hogs sank 3.2 cents to 103.850 cents per pound and hit their lowest price since Jan. 21.
U.S. wholesale pork cutout values were mostly lower, with the carcass value down by $1.02 per hundredweight (cwt), the U.S. Department of Agriculture said.
Estimated profit margins for pork processors turned higher, rising to $2.10 per hog from a loss of $6.55 per head on Monday and a loss of $5.50 per head a week ago, according to HedgersEdge.com.
Margins for beef processors also improved as beef cutout values softened. Margins rose to $123.15 per head of cattle from $114.40 per head on Monday, HedgersEdge said. A week ago, margins were estimated at $163.15 per head.
Choice cuts of boxed beef dropped $3 to $259.55 per cwt, while select cuts eased 89 cents to $247.34 per cwt, the USDA said.
In cattle futures, CME June live cattle futures edged up 0.125 cent to settle at 135.325 cents per pound. The market has rebounded this week from losses last week, traders said.
CME August feeder cattle jumped 2.2 cents to 176.275 cents per pound and touched its highest price since April 22. Declining prices for grain used for feed helped support feeder cattle futures, traders said.