LIVESTOCK-Lean hog futures hit one-month low on weak cash values
Julie Ingwersen / Reuters
January 13, 2020 / 5:51 PM
CHICAGO, Jan 13 (Reuters) - Lean hog futures on the Chicago Mercantile Exchange (CME) fell to a one-month low on Monday, pressed by ample U.S. pork supplies and a discount in the cash hog market relative to futures, traders said.
“We’ve got a problem where we are still seeing big hog numbers,” said Doug Houghton, analyst with Brock Associates, noting weekly U.S. government slaughter data.
The U.S. Department of Agriculture on Monday revised the weekly hog slaughter through Jan. 10 to 2.477 million head, up from 2.373 million a year earlier.
CME February hog futures ended down 1.350 cents at 65.900 cents per pound after dipping to 65.575 cents, the contract’s lowest since Dec. 3 but still about 6 cents above the latest lean hog index of 59.36 cents.
“The nearby February contract got hit hardest because it was holding a substantial premium to the cash index, which was down today and will be down tomorrow,” Houghton said.
Deferred hog futures contracts also declined but found underlying support from hopes an interim U.S.-China trade deal due to be signed on Wednesday will boost U.S. pork exports to China.
U.S. Treasury Secretary Steven Mnuchin on Sunday reiterated Washington’s position that China has committed to increase purchases of U.S. agricultural products to $40 billion-$50 billion annually. But a lack of detail on the accord has left some traders cautious.
CME live cattle futures also sagged on...