US hog futures falls as meatpacker cuts demand; cattle futures gain

US hog futures fell to the lowest this year on speculation that meatpacker demand for the animals is shrinking as profits wane.

 

 

Kropf said that curbed meatpacker profit margins as consumers buy less pork amid the recession.

 

He added that margins on the domestic side are seen to have been worsening and worse and it was no different for pork than it is for beef as both are struggling to move because consumers are not spending a lot for higher-priced cuts.

 

Hog futures for April settlement fell US$0.62, or 1 percent, to US$0.60 a pound on the Chicago Mercantile Exchange.

 

Earlier, the price touched US$0.59, the lowest for a most-active contract since December 31. Hogs have dropped 8.9 percent in the past year.

 

Wholesale pork rose US$0.09, or 0.2 percent, to US$0.57 a pound, according to USDA data shown on Thursday (Feb 5). The price has dropped 6.2 percent in the past year.

 

Cattle futures advanced for the first time in three days on speculation that the lowest beef prices in 10 months are spurring purchases by retailers.

 

According to USDA's data, Wholesale choice beef fell US$0.57, or 0.4 percent, to US$1.39 a pound at midday, the lowest since April 7. The price dropped for a 12th straight trading day, the longest slump since July 2006.

 

Meatpackers shipped 16.1 million pounds of beef in the first three days of this week, the most since the similar period ended January 7.

 

Cattle futures for April delivery rose US$0.55, or 0.6 percent, to US$0.86 a pound. The price has slid 8.6 percent in the past year.

 

Feeder-cattle futures for March delivery gained US$0.70, or 0.75 percent, to US$0.94 a pound.