Lower Cash, Pork Prices Pull Down CME Hog Futures; Cattle Retreat

Chicago Mercantile Exchange lean hogs finished lower on Wednesday, pressured by weaker cash and wholesale pork prices, said traders.

The said fund liquidation further weighed on the market.

December hogs, which will expire on Dec. 14, ended down 0.450 cent per pound at 63.825 cents. Most actively-traded February closed 1.550 cents lower at 68.950 cents, and below the 20-day moving average of 69.360 cents.

"Better hog numbers are still anticipated, which could influence prices lower later this month," an analyst wrote in his newsletter to clients.

Based on increased hog weights, animals are now coming to market after backing up on farms over the Thanksgiving holiday and after a packing plant closed last week to install equipment, said analysts and traders.

Packers are expected to compete less for hogs prior to plants shutting down for the Christmas and New Year's holidays.

Retailers are reluctant to buy large amounts of pork at a time when ham business is nearly done for the year-end holidays and as consumers focus on shopping for Christmas gifts, said analysts.

The U.S. Department of Agriculture (USDA) monthly export sales data on Wednesday showed U.S. pork in October totaled 494.6 million pounds, up 17.4 percent from September and up 9.5 percent from October 2016.

Live Cattle Futures Retreat

Wednesday's wholesale beef price pullback, and expectations for lower cash prices this week, weighed on CME live cattle futures, said traders.

Sell stops and technical selling hastened market losses, they said.

December live cattle finished down 0.525 cent per pound at 115.900 cents. February ended 1.250 cents lower at 119.275 cents, and below the 100-day moving average of 119.352 cents.

The lack sales at Wednesday's Fed Cattle Exchange suggests processors may have enough livestock for near-term production, a trader said.

A week ago, slaughter-ready, or cash, cattle in the U.S. Plains fetched $119 to $121 per cwt.

Beef sales face headwinds from plentiful pork and poultry supplies, the trader said.

USDA's export report showed total U.S. beef exports in October at 260.0 million pounds, up 7 percent from the month before and up 13 percent from a year earlier.

CME feeder cattle futures slid to a three-month low for a second straight session on sell stops and lower live cattle futures, said traders.

January feeder cattle closed 1.800 cents per pound lower at 146.025 cents.