Hogs Drop on Signs of Slow Pork Demand; Cattle Steady
(Corrects production forecast and estimate in second paragraph to 2012 output estimates.)
Hog prices fell, heading for the biggest drop in almost four weeks on speculation that demand for pork in the U.S. will slow. Cattle were little changed.
Meatpackers processed 1.573 million hogs in the first four days of this week, down 2.3 percent from the same period a week earlier, U.S. Department of Agriculture data showed. Pork production in the U.S. will rise 2.7 percent to 23.4 billion pounds (10.6 million metric tons) in 2012 from a year earlier, the government said in a report June 12.
“Longer-term pork fundamentals, both supply and demand, are quite negative,” Dennis Smith, a senior account executive at Archer Financial Services in Chicago, said in a telephone interview. “Overall, I’m just not bullish on the hog market.”
Hog futures for August settlement slid 0.8 percent to 92.25 cents a pound at 10:16 a.m. on the Chicago Mercantile Exchange. A close at that level would be the biggest decline for the most- active contract since May 21. Prices rose 10 percent this year through yesterday.
Wholesale pork climbed 2.6 percent to 91.58 cents yesterday, the highest since Nov. 7, USDA data show. Prices are up 7.5 percent this year.
“The product is a really forced affair,” Smith said. “The packers are able to ask higher prices and receive it, but only because we’ve tightened up a little bit on the supplies.”
Cattle futures for August delivery fell 0.2 percent to $1.16825 a pound in Chicago. Through yesterday, the commodity was down 3.6 percent in 2012.
Feeder-cattle futures for August settlement added 0.2 percent to $1.5655 a pound.
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