CME Group lean hog futures on Wednesday fell to their lowest prices since January amid concerns about demand for U.S. pork, analysts said.
Inflation and a decline in U.S. pork exports to China, the world’s top pork consumer, are hurting demand, analysts said. The consumer price index rose 8.3% in the 12 months through April, according to the Labor Department.
The size of the U.S. hog herd has declined over the past year, as farmers grapple with swine diseases and high prices for animal feed. Some producers have been keeping hogs on farms longer to add weight and improve profits, analysts said.
Heavier hogs could boost pork output.
Hogs weighed an average of 288.9 pounds in a region that includes Iowa, southern Minnesota and South Dakota in the week ended May 7, the U.S. Department of Agriculture said. That was up from 288.5 pounds a week earlier and 283.9 pounds a year ago.
The USDA said separately that U.S. wholesale pork cutout values were mostly lower, with the carcass value down by $0.70 per hundredweight (cwt).
Benchmark CME June lean hogs ended down 0.725 cent at 100.850 cents per pound. July hogs dropped 1.425 cents to close at 101.550 cents per pound.
Feeder cattle futures also eased at the CME, while live cattle futures advanced.
June live cattle futures settled 1.175 cents higher at 133.575 cents per pound. August feeder cattle fell 1.850 cents to 170 cents per pound and reached their lowest price since April 29.
Rising prices for grains used for feed helped pressure feeder cattle, traders said. Traders on Thursday will review a monthly U.S. Department of Agriculture global supply and demand report.