Hog futures fell for the first time this week on speculation that U.S. producers are starting to retain more sows for breeding, signaling a rebound in the size of the herd. Cattle had the longest rally in almost two years.
The hog-breeding herd on Sept. 1 probably rose to 5.866 million hogs, up 1.4 percent from a year earlier, according to a Bloomberg survey of 10 analysts. The cash price for immediate delivery jumped as much as 7.4 percent since Sept. 6 on concern that the supply of animals available for slaughter was shrinking. The U.S. Department of Agriculture will release its quarterly estimate of inventories 3 p.m. tomorrow in Washington.
“Hog numbers are going to go up,” Mark Schultz, the chief analyst at Northstar Commodity Investment Co. in Minneapolis, Minnesota, said in a telephone interview.
On the Chicago Mercantile Exchange, hog futures for December settlement dropped 1 percent to close at 87.725 cents a pound at 1 p.m. The price climbed 2.9 percent in the previous three days.
While the breeding herd will increase, the total number of hogs will drop 1 percent to 67.463 million animals from a year earlier, the Bloomberg survey showed.
Yesterday, the average weight of hog carcasses at slaughtering plants rose to 205.22 pounds, up 1.5 percent from a year earlier, USDA data show.
Cattle futures for December delivery advanced 0.2 percent to $1.31575 a pound. The price climbed for the seventh straight session, the longest rally since Oct. 3, 2011. Yesterday, the commodity reached $1.3175, the highest for a most-active contract since Feb. 8.
Feeder-cattle futures for November settlement rose 0.7 percent to $1.6515 a pound. Earlier, the price reached a record $1.6525.