CME lean hog futures hit contract lows as live cattle slide to 11-month low

what happened

Lean hog futures on the Chicago Mercantile Exchange fell to fresh life-of-contract lows on Friday, Reuters reported, as demand for US pork stayed weak. Consumers are squeezed by high gasoline costs, and some shoppers feel pork turns out dry and bland when cooked. The December contract LHZ26 closed 1.575 cents lower at 53.525 cents per pound after touching 53.175 cents intraday. The February 2027 contract LHG27 also hit a contract low.

Exports are struggling too. China, the largest consumer, has a surplus of its own hogs, and Mexico has bought less from the US. US exports in September dropped 7% by volume and 14% by value from a year earlier, according to US government data. Dan Halstrom, CEO of the US Meat Export Federation, an industry group, said global hog prices have come under intense pressure.

In cattle, the pressure came from cash prices, which fell as much as $11 per hundredweight this week to $212 in Iowa and $213 in Nebraska. December live cattle closed 0.35 cent lower at 214.050 cents per pound, after dipping to their lowest since December 2, and have now fallen for nine straight sessions. January feeder cattle ended 1.95 cents lower at 318.375 cents, the lowest since September 18.

why it matters

The signal for markets is straightforward: demand is soft while supply is plentiful, which weighs on the whole US meat complex. Lower futures prices feed through to processors and producers who use these contracts to hedge. The next moves will depend on export data and retail sales.

market impact

US hog and cattle markets: weak demand and oversupply pressure futures lower

• ▼Lean hog futures (CME) pressure down — weak demand and plentiful supply keep pushing prices lower
• ▼Live cattle futures (CME) pressure down — falling cash prices drag futures lower

tags

instruments