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Live and feeder cattle slump - CME

13 January 2022

Pig slaughter hits five-month low

Chicago Mercantile Exchange (CME) lean hog futures rose on bargain buying on Wednesday, traders said, though US pig slaughtering sank to its lowest level since August as rising cases of the Omicron coronavirus variant hit meat plants.

Live cattle and feeder cattle futures slumped as traders remain concerned that the highly contagious variant is causing more staffing shortages, limiting livestock slaughtering, reported Reuters.

COVID-19 hospitalisations in the United States have increased by about 33% and deaths are up by about 40% from a week earlier, the head of the US Centers for Disease Control and Prevention said on Wednesday.

Meatpacking, an early epicenter of the pandemic in 2020, is among the sectors being disrupted by the surge in cases.

Processors slaughtered an estimated 433,000 hogs on Wednesday, a five-month low that is down 12% from a year ago, the US Department of Agriculture (USDA) said. Processors slaughtered an estimated 114,000 cattle, down about 3% from last year, the agency said.

CME February lean hogs ended up 1 cent at 78.850 cents a pound in a rebound from a one-month low reached on Tuesday, which was the third consecutive day of losses.

The USDA, in a monthly crop report, trimmed its US pork production estimates for 2021 and 2022 because of a slower pace of slaughtering. The US pig supply has tightened over the past year and slaughterhouses have been forced to slow line speeds.

The USDA lowered its 2022 pork production forecast by 0.3% from December to 27.53 billion pounds.

"Slower expected hog slaughter in the second half of the year more than offsets higher slaughter expectations in the first and second quarters," the USDA said.

CME February live cattle futures settled down 1.100 cents at 136.575 cents per pound. March feeder cattle futures ended 1.325 cents weaker at 165.025 cents per pound.

Source: Reuters


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