Hog prices had the biggest drop in almost two months on speculation that demand for pork in the U.S. will ebb. Cattle futures also declined.
Meatpackers processed 1.96 million hogs this week, down 2.1 percent from a week earlier, U.S. Department of Agriculture data showed. Pork production will rise 2.7 percent to 23.4 billion pounds (10.6 million metric tons) in 2012 from a year earlier, the government said on 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 1.9 percent to settle at 91.2 cents a pound at 1 p.m. on the Chicago Mercantile Exchange, the biggest decline for the most-active contract since April 18. The price has climbed 8.2 percent this year.
Yesterday, wholesale pork climbed 2.6 percent to 91.58 cents a pound, the highest since Nov. 7, USDA data show. The price has gained 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 0.3 percent to $1.1665 a pound in Chicago. Earlier, the price touched $1.16325, the lowest since May 10. The commodity has dropped 4 percent in 2012.
Feeder-cattle futures for August settlement dropped 0.1 percent to $1.56025 a pound. Earlier, the price touched $1.556, the lowest since May 30.