Hog futures fell to the lowest in almost two weeks after a report showed the U.S. sow herd unexpectedly increased, signaling more pork supplies. Cattle prices dropped the most in a month.
About 5.817 million sows were being held back for breeding at the start of this month, up 0.2 percent from 5.803 million a year earlier, the U.S. Department of Agriculture said after the close of regular trading on Dec. 28. Ten analysts in a Bloomberg News survey expected the herd to decline 0.8 percent, on average.
“The hog and pig report was negative,” Christian Mayer, a market adviser at Northstar Commodity Investments Co. in Minneapolis, said in a telephone interview. “When you’re looking at more pigs down the line, that’s not what the trade was necessarily anticipating. We’ll have a time where we set back a little bit.”
Hog futures for February settlement fell 0.8 percent to close at 85.725 cents a pound at 1 p.m. on the Chicago Mercantile Exchange. Earlier, the price touched 84.85 cents, the lowest for the most-active contract since Dec. 18.
This year, hogs rose 1.7 percent, the fifth straight increase and the longest rally since at least 1987, according to exchange data compiled by Bloomberg. The contract started in February 1966.
Sows averaged 10.15 pigs per litter in the three months ended Nov. 30, a record for the quarter and up from 10.02 a year earlier, the USDA said in the report.
Cattle futures for February delivery declined 1 percent to close at $1.323 a pound in Chicago, the biggest decline since Nov. 30.
This year, the price gained 8.9 percent, the fourth straight gain and a record rally. Cattle futures debuted in November 1964.
Feeder-cattle futures for March settlement slipped 0.3 percent to settle at $1.54275 a pound. This year, the price climbed 3.7 percent, the fourth straight gain and the longest rally since 1990.