Top Stories
Top Stories

LIVESTOCK-CME lean hogs drop on demand concerns, plentiful supplies

Karl Plume

CHICAGO, April 29 (Reuters) - U.S. lean hog futures fell for a third straight session on Monday on large supplies of hogs and worries about cooling domestic and export demand for pork, traders said.

Cash pork prices were firm, but a stretch of cold and wet weather around parts of the United States, including an unusual spring snowstorm in the Midwest over the weekend, has dampened demand for pork for outdoor grilling.

Meanwhile, export demand from China has languished following hopeful signs earlier this year that the world's top pork consumer would ramp up U.S. pork purchases as its domestic herd has been thinned by African swine fever.

"We're sitting here with record supplies of hogs in the U.S. and expansion still continuing, with hopes that China is going to be the savior by taking some of these supplies," said Don Roose, president of U.S. Commodities.

"We're taking risk premium out of the market again," he said, citing recent sizable long holdings by large speculators.

Commodity funds have built up sizable net long positions in CME livestock futures, leaving markets prone to bouts of long liquidation.

Traders will be eagerly awaiting the U.S. Agriculture Department's weekly export sales data on Thursday for confirmation of any sales to China. Last week's report showed a net decline in sales to China, triggering a sharp sell-off in futures.

China's WH Group Ltd, the world's largest pork producer, on Monday said its first-quarter profit fell 21 percent on weak fresh pork prices in all markets and lower sales volumes in the United States.

Benchmark Chicago Mercantile Exchange (CME) June lean hogs ended down 0.700 cent at 88.050 cents per pound, a four-week low. July futures fell 0.900 cent to 92.550 cents.

Live cattle futures also dropped, dragged lower by lower lean hogs and worries about weather-reduced demand for beef in parts of the United States.

CME June live cattle futures settled down 0.250 cent at 114.800 cents per pound, the lowest since mid-December. August live cattle were down 0.100 cent at 112.550 cents per pound.

August feeder cattle fell 1.775 cents to settle at 151.075 cents. (Reporting by Karl Plume; Editing by Lisa Shumaker)