Hogs Drop for First Time This Week on Breeding HerdDalton Barker
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.