Historically large pork and chicken supplies have pressured prices that retailers are willing to pay for meat and poultry products, dragging livestock prices lower over the past week. During the selling, hog futures hit a six-year low and cattle prices touched their lowest in a month on Tuesday.
Additionally, as prices bounced back, short-covering helped support both markets on the rebound. Investors with heavy short positions are covering, or buying back, their shorts in the event of share appreciation. Consequently, the additional buying momentum from short sellers covering their options contracts helped bolster prices even further.
iPath Bloomberg Livestock Subindex Total Return ETN
For more information on the commodities market, visit our commodity ETFs category.
Max Chen contributed to this article.