Hogs Drop to 3-Week Low as Midwest Weather Cools; Cattle SteadyDalton Barker
Hog futures fell to a three-week low as signs of milder Midwest weather eased concern that animals lost weight during the unusually high temperatures of the past three months. Cattle prices were little changed.
The average hog-carcass weights are up 0.4 percent in September after dropping in each of the past three months, government data show. Average high temperatures in Iowa and Minnesota, the main hog-producing states, dropped by 2 to 3 degrees Fahrenheit in the first 14 days of the month from August, which was as much as 2.5 degrees warmer than normal, according to the High Plains Regional Climate Center. Animals tend to eat less during hot summer months.
“We are going to recover that carcass weight pretty quickly,” which will mean an increase in pork output, Lawrence Kane, a market adviser for Stewart-Peterson Group in Yates City, Illinois, said in a telephone interview.
Hog futures for December settlement decreased 1.4 percent to 86.075 cents a pound at 1 p.m. on the Chicago Mercantile Exchange, after touching 85.9 cents, the lowest for the most-active contact since Aug. 29. Prices ended the week down 1.3 percent, the first drop for December futures in a month.
Carcasses at slaughtering plants weighed 205.06 pounds (93.01 kilograms) yesterday, up from 203.57 pounds at the end of August, U.S. Department of Agriculture data show. Weights reached a nine-month low of 202.42 pounds on July 22. Pork production in the three months ending Sept. 31 will reach 5.7 million pounds, up 1.2 percent from the same quarter in 2012, according to the USDA.
Cattle futures for December delivery rose less than 0.1 percent to close at $1.2975 a pound on the CME, capping a 0.5 percent gain this week that was the second straight increase.
Feeder-cattle futures for October delivery rose 0.5 percent to $1.60225 a pound, up 0.6 percent for the week. Earlier, prices reached $1.6085, the highest for a most-active contract since June 2012.