US Hog, Cattle Markets Both Rise – CME
The Chicago Mercantile Exchange (CME) witnessed a rise in livestock futures on Wednesday. This movement was closely tied to the positive momentum from record highs on Wall Street following the election of Donald Trump as the US president. Analysts attributed the rise to the belief that a robust economy could bolster the demand for US meat products.
“A rising tide lifts all boats,” commented Ted Seifried, chief market strategist for Zaner Ag Hedge, reflecting the optimism surrounding the market dynamics.
Lean Hog Futures Bounce Back
In a notable recovery, lean hog futures saw prices rebound after experiencing a dip to their lowest level in over a week. Previously, the market had seen a decline after reaching contract highs last week due to smaller-than-expected supplies of US hogs.
CME December lean hog futures made a comeback, ending up 1 cent at 82.125 cents per pound on Wednesday.
Contributing to this recovery, the wholesale pork carcass cutout value also witnessed a rise. A significant $6.20 increase in pork bellies was reported by the US Department of Agriculture. This was a reversal from the previous day when belly values had decreased by $6.28.
Traders noted that recent rallies have been supported by strong demand for pork bellies. However, they also cautioned about potential downside risks, noting, “The main downside price risk for the hog market now is that recent gains are heavily concentrated in bellies alone,” according to Steiner Consulting.
Impact of Currency Movements
The market also observed the fluctuations in the Mexican peso following Trump’s election victory. A weaker peso could impact Mexico’s demand for US hams, though the currency had largely recovered from an earlier slump to its lowest level in more than two years.
Beef Markets See Recovery
The beef market also experienced positive movement. CME December live cattle ended the day up 0.626 cent at 185.4 cents per pound, breaking a downward pattern of six consecutive sessions.
Meanwhile, CME January feeder cattle futures jumped by 1.675 cents, closing at 244.025 cents per pound, reaching their highest level since October 29.
However, USDA data indicated some weakness in choice and select cuts of boxed beef.
Looking forward, the USDA is scheduled to release its weekly report on US beef and pork export sales on Thursday, which will provide further insights into the markets.
This rise in the agricultural sector demonstrates the far-reaching impact of broader economic trends, underscoring the interconnectedness of financial and commodity markets.
These developments reflect a dynamic period in the livestock markets, showcasing the influence of economic signals and market supply dynamics on pricing trends.
