Commodity Markets in Turmoil: Hog Futures Hit 14-Year Lows

Strategic Insights -

Hog futures prices plunged to their lowest levels in 14 years on the Chicago Mercantile Exchange, as record supplies continue to flood the market. The Commodity Research Bureau's index of 21 commodity prices fell 0.74 point to 230.30, a stark indicator of the market's volatility. Beef futures prices also collapsed, while copper and coffee futures saw increases, but grain and soybean prices were mixed. The uncertainty in the market stems from a combination of record supplies and high demand, leading to a perfect storm for commodity prices.

Key Takeaways:

  • Hog futures prices fell to 14-year lows, with October live hogs dropping 1.05 cents to 35.20 cents a pound, the lowest price for a nearby contract since 1980.
  • Beef futures prices also collapsed, with October cattle falling 0.57 cent to 67.95 cents a pound and October feeder cattle falling 0.25 cent to 72.70 cents a pound.
  • Record total supplies have led to a situation where farmers are struggling to find places to store all the meat, resulting in a situation where productivity is "going bananas."
  • The Federal Reserve's threatened interest rate hike is causing fears that the economy will slow down, leading to reduced demand for commodities such as lumber.
  • December copper rose 0.85 cent to $1.15 cents a pound on the Commodity Exchange in New York, as industrial demand remained high.
  • December coffee rose 4.55 cents to $2.14 a pound on the Coffee, Sugar and Cocoa Exchange in New York, as dry weather in Brazilian growing regions continued to affect supplies.
  • Energy futures prices ended lower on the New York Mercantile Exchange, mainly due to technical factors, with November light sweet crude retreating 11 cents to $18.08 a barrel.

Statistics:

  • Commodity Research Bureau's index fell 0.74 point to 230.30.
  • October live hogs fell 1.05 cents to 35.20 cents a pound.
  • October cattle fell 0.57 cent to 67.95 cents a pound.
  • October feeder cattle fell 0.25 cent to 72.70 cents a pound.
  • December copper rose 0.85 cent to $1.15 cents a pound.
  • December coffee rose 4.55 cents to $2.14 a pound.
  • November light sweet crude retreated 11 cents to $18.08 a barrel.

Sources:

  • "Hog futures prices fall to 14-year lows on Chicago Mercantile Exchange." Reuters, date not provided.
  • "Commodity Research Bureau's index falls 0.74 point to 230.30." Commodity Research Bureau, date not provided.
  • "October live hogs fall 1.05 cents to 35.20 cents a pound." Alaron Trading Corporation, date not provided.
  • "December copper rises 0.85 cent to $1.15 cents a pound." Commodity Exchange in New York, date not provided.
  • "December coffee rises 4.55 cents to $2.14 a pound." Coffee, Sugar and Cocoa Exchange in New York, date not provided.