20 March 2023

2 minute read

By: Global Ag Media

North America

Chicago Mercantile Exchange (CME) lean hog futures ended slightly higher in the nearby contract on Friday in a rebound from steep declines this week, though deferred contracts extended losses, Reuters reported, citing traders.

Lower cutout values continue to hang over the futures market, along with broader pressure from market turmoil in the banking sector, traders said.

"You have a little bit of recovery up front today, and I think that's a reflection of it being oversold," said Matt Wiegand, commodity broker for FuturesOne.

Front-month April lean hogs finished up 0.425 cent at 79.875 cents per pound. The contract lost 8.7% for the week.

June hogs closed down 0.150 cent at 93.325 cents, paring its losses after dropping to a December 2021 low of 89.700. The contract on Thursday sank by the maximum daily trading limit of 4.75 cents.

"Once the momentum is running one way, you have a hard time stopping it," Wiegand said about the losses.

The daily trading on Monday will revert to its standard 4.75 cents, after temporarily widening to 7 cents on Friday, according to exchange operator CME Group.

Pork cutout values remained weak. Hams slid by another $5.22 to $70.91 per cwt, after dropping by $6.00 on Thursday and $6.34 on Wednesday, the US Department of Agriculture said. Traders said they are concerned that strength in the US dollar and weakness in Mexico's peso are hurting Mexican demand for hams.

In cattle futures, prices eased in nearby contracts as traders monitored outside markets.

CME April live cattle ended 0.025 cent lower at 162.325 cents per pound. April feeder cattle finished down 0.500 cent at 194.650 cents per pound.

After the close of trading, the USDA reported that the number of cattle on feed as of March 1 was down 4.5% from a year earlier, which was in line with analysts' expectations.

Placements of cattle into feedlots in February were down 7.2%, compared to expectations for a 6% drop.