Hog prices rose to the highest in almost a year on signs that hot weather in the U.S. will curb livestock weights and deter producers from slaughtering animals, reducing pork supplies. Cattle fell.
Temperatures will be at least 5 degrees above normal from Colorado to Massachusetts for the rest of the week and possibly higher in the Midwest, Commodity Weather Group LLC said in a report. On June 29, the average hog carcass weighed 203.6 pounds (92 kilograms), down 3.2 pounds from a week earlier, government data show. Livestock use more energy to stay cool during hot weather, reducing weight.
“The really big thing is this heat coming down the week,” Lou Arens, a broker at PCI Advisory Services, said in a telephone interview from Waucoma, Iowa.
Hog futures for August settlement climbed 0.2 percent to settle at 94.975 cents a pound at 1 p.m. on the Chicago Mercantile Exchange. Earlier, the price reached 96.325 cents, the highest for the most-active contract since July 7, 2011.
Last week, some producers were “backing off” the number of pigs they were sending to packing plants because of the heat, Arens said.
Cattle futures for August delivery dropped 1 percent to settle at $1.19275 a pound, the biggest drop since June 13. The price has declined 1.8 percent this year.
Feeder-cattle futures for August settlement declined 1.2 percent to $1.4965 a pound.