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Hogs Rise on Speculation Animal Supply May Tighten; Cattle Drop

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June 18 (Bloomberg) -- Hog futures advanced for the first time in four sessions on speculation that animal supplies in the U.S. may shrink. Cattle prices fell.

Wholesale pork rose 0.5 percent to $1.0482 a pound yesterday, the highest since Aug. 22, 2011, U.S. Department of Agriculture data show. Porcine epidemic diarrhea virus, a hog disease that has spread to at least 11 states, may slow weight gain and shrink pig litters, said Lawrence Kane, a senior market adviser at Stewart-Peterson Group.

Concern over “supply getting tighter, with this hog disease,” has fueled the price gain, Kane said in a telephone interview from Yates City, Illinois. “It’s an unknown, and it’s scary to us right now.”

Hog futures for August settlement rose 0.7 percent to close at 97.3 cents a pound at 1 p.m. on the Chicago Mercantile Exchange. The contract is up 4.1 percent in June, heading for a third straight monthly gain.

The U.S. Department of Agriculture reported a detection of PEDV on May 17 and noted that it doesn’t affect people and is not a food-safety concern. Spot hogs added 0.4 percent to 99.58 cents a pound yesterday, the sixth gain in seven sessions, government data show.

Cattle futures for August delivery declined 0.2 percent to $1.19025 a pound in Chicago. Prices are down 10 percent this year.

Feeder-cattle futures for August settlement slipped 0.5 percent to $1.438 a pound.

To contact the reporter on this story: Elizabeth Campbell in Chicago at ecampbell14@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net.

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