Hog futures fell over 3% to the lowest point this year as pork belly prices continued to drag down the market.
Pork bellies have fallen sharply after soaring to record-high prices earlier this summer on the back of booming demand for bacon. Prices fell $6.50 to $107.71 per 100 pounds at midday Tuesday, around half their late July peak.
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Lower belly prices have rumbled the hog market, which continues to face burdensome supplies of livestock. Meat packers have responded to falling meat prices by lowering bids for slaughter-ready hogs, pushing their margins higher while pressuring cash-market prices. Processing margins averaged above $40 a head last week.
"Until something comes along to change things, packers continue to have their way with the cash hog market," said Dennis Smith, a broker at Archer Financial Services in Chicago.
October-dated lean hog futures fell 3.5% to 59.45 cents a pound at the Chicago Mercantile Exchange, the lowest close since mid-December.
Cattle futures also fell on the back of weaker beef prices. Wholesale beef fell 32 cents to $191.24 per 100 pounds at midday Tuesday, on track for a fourth consecutive day of losses.
Traders are looking to the online Fed Cattle Exchange auction for cash-market cattle on Wednesday for this week's cash direction. Last time only 125 cattle sold at an average of $163 per 100 pounds dressed, though prices went on to rise over the course of the week. This time feedlots have listed 1,063 head for sale.
CME October live cattle futures fell 0.9% to $1.06275 a pound. Feeder cattle futures were also mostly lower.
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(END) Dow Jones Newswires
September 12, 2017 15:16 ET (19:16 GMT)