Chicago Mercantile Exchange (CME) lean hog futures slumped for the seventh time in eight trading sessions on Wednesday and hit fresh contract lows on weak demand and a drop in cash pork prices to the lowest in 3-1/2 years, reported Reuters.
Rising inflation, driven largely by soaring energy costs, and deteriorating consumer sentiment has hit pork demand especially hard despite lower prices for the meat.
Data released by the USDA on Wednesday showed the Consumer Price Index in September increased 3.7% on a year-over-year basis as the cost of gasoline surged.
Benchmark CME December lean hogs fell to a contract low of 66.000 cents per pound and settled 1.950 cents lower at 66.075 cents. February 2027 through June contracts also posted new life-of-contract lows during the session.
"Even though we're running pork production slightly under last year now, the concern still remains firmly focused on demand," said Rich Nelson, chief strategist at Allendale.
"Consumers are paying higher energy costs and it is clear that they're making cutbacks in certain areas. And for now at least, it does appear to be pork," he said.
The wholesale cash pork cutout value fell $1.23 on Wednesday to $79.45 per hundredweight, down 23% from a year ago and the lowest level since April 2023, according to USDA data.
CME cattle futures were also pressured by inflationary concerns, although tight cattle supplies have underpinned prices and kept markets generally range-bound. The market was awaiting further direction from cash cattle trade in the Plains, which has been limited so far this week.
December live cattle futures ended the day down 1.250 cents at 225.125 cents per pound, peaked at 227.600 cents per pound, near technical chart support at the benchmark contract's 100-day moving average. November feeders were down 2.575 cents at 338.450 cents pound.