CHICAGO, Aug 17 (Reuters) - Lean hog futures on the Chicago
Mercantile Exchange ended lower on Tuesday on long liquidation
and uncertainty about demand for various cuts of pork, traders
Benchmark CME October lean hogs settled down 1.100
cents, or 1.2%, at 87.900 cents per pound, retreating from
Monday's nearly 3% rise.
Commodity funds hold a net long position in CME hog futures,
leaving the market vulnerable to bouts of long liquidation at a
time of waning pork export demand from China and gyrating
U.S. wholesale pork cutout values, reported twice a day by
the U.S. Department of Agriculture, have been volatile. The USDA
reported the pork carcass value at midday Tuesday at $127.81 per
hundredweight (cwt), up $8.46 from Monday, but the closing
afternoon value was revised to $118.12 per cwt, a net decline of
$1.23 from Monday.
"The volatility in the cutout price, and particularly with
some of these major cuts like the loins, hams and bellies, is
making people uncomfortable holding positions. It's creating
uncertainty about the demand," said Dan Norcini, an independent
Cattle futures also fell, pulling back from Monday's gains
on uncertainty about meat packers' needs for fat cattle despite
robust beef prices.
CME benchmark October live cattle settled down 1 cent
at 128.125 cents per pound and September feeder cattle futures
ended down 1.075 cents at 160.925 cents per pound.
"The packers continue to see issues with labor availability
(and) the ability to process livestock, which tends to boost the
price for beef. At the same time, that tends to depress cattle
prices," said Altin Kalo, economist at Steiner Consulting Group.
Wholesale beef prices continued their climb on Tuesday, with
choice cuts jumping by $8.26 to $338.06 per cwt, according to
the USDA. Select cuts rose $3.22 to $306.77 per cwt.
Declines in Wall Street equity markets and crude oil hung
over the markets as investors considered the economic impact of
the ongoing spread of the Delta coronavirus variant.
(Reporting by Julie Ingwersen; Editing by Sam Holmes)