Hogs Slump Most in Seven Months on Slow Demand; Cattle DeclineElizabeth Campbell
Hog futures fell the most in seven months on speculation that slowing economic growth will curb demand for U.S. pork. Cattle also dropped.
U.S. payrolls grew by 88,000 workers in March, the smallest gain in nine months and less than the most-pessimistic forecast in a Bloomberg survey, Labor Department data showed today. U.S. equity markets tumbled and the Standard & Poor’s GSCI Spot Index of 24 commodities touched a five-month low. The jobs report may mean consumers will eat less meat as they switch to cheaper foods, said Doug Houghton at Brock Associates.
“Everybody’s watching for the seasonal increase in demand, and we’re really not seeing it yet,” Houghton, a commodity analyst, said in a telephone interview from Milwaukee. “The pork supplies look ample.”
Hog futures for June settlement declined 2.5 percent to close at 89.7 cents a pound at 1 p.m. on the Chicago Mercantile Exchange, the biggest slump for a most-active contract since Sept. 6. Prices ended the week down 1.5 percent, the first decline in a month.
The Lean-Hog Index, a measure of spot prices, traded 15 cents below the June contract yesterday. The premium in the futures market to the cash was “too much” and spurred the decline today, said Don Roose, president of U.S. Commodities Inc. in West Des Moines, Iowa.
Cattle futures for June delivery slipped 0.7 percent to $1.215 a pound on the CME, after reaching $1.213, the lowest since March 27. Prices dropped 2.3 percent this week.
Feeder-cattle futures for May settlement fell 1.1 percent to $1.443 a pound, the fourth straight decline.