Hog futures fell to a three-month low on signs that supplies of U.S. hogs are more than sufficient as demand weakens. Cattle prices also declined.
Meatpackers processed 2.145 million hogs last week, up 0.3 percent from a week earlier, U.S. Department of Agriculture data show. Spot hogs fell 4.7 percent last week to 81.28 cents a pound, the biggest drop since Nov. 16, and wholesale pork slumped 2.1 percent, the second straight decline, government data show.
“Hog numbers, at least coming to market, are still being adequate,” Mark Schultz, the chief analyst for Northstar Commodity Investment Co. in Minneapolis, said in a telephone interview. Cash-market prices are “in a free-fall status for the short term,” he said.
Hog futures for April settlement declined 1.3 percent to 83.2 cents a pound at 10:37 a.m. on the Chicago Mercantile Exchange, after touching 83 cents, the lowest for the most- active contract since Nov. 12.
Hogs may bottom short-term if a winter storm disrupts supplies, Schultz said.
Hedge funds lowered net-long positions in hogs by 21 percent to 33,986 contracts in the week ended Feb. 12, the biggest drop since Nov. 6, U.S. Commodity Futures Trading Commission data show.
Cattle futures for April delivery fell 0.5 percent to $1.2975 a pound in Chicago. A close at that price would be the biggest retreat for the most-active contract since Feb. 8.
Feeder-cattle futures for March settlement slid 0.3 percent to $1.42925 a pound.
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