June 16, 2010

Hog futures extended a slide to a 10-week low on speculation that US consumers are slowing pork purchases as the economy remains under pressure.

Wholesale pork tumbled to a seven-week low last week, to 84.78 cents a pound, USDA data show. The price is still 49% higher than a year earlier, which may be curbing retail sales, said Don Roose, the president of US Commodities Inc.

Hog futures for July settlement fell 1.7 cents, or 2.1%, to 78.025 cents a pound on the Chicago Mercantile Exchange. Earlier, the price touched 77.85 cents, the lowest level for a most-active contract since March 26. Futures are still up 30% in the past year because of smaller herds.

Cattle futures for August delivery slipped 0.9 cent, or 1%, to 87.725 cents a pound. The price earlier touched 87.7 cents, the lowest for a most-active contract since Jan. 12. Feeder-cattle futures for August settlement declined 0.475 cent, or 0.4%, to US$1.084 a pound.

Wholesale choice beef prices slumped for a 14th straight session at midday, the longest slide since February 2009, according to the USDA. Beef sold for US$1.6009 a pound, the lowest level since March 22.

Livestock futures also fell on speculation that US meat exports will shrink as the dollar rallies. The dollar fluctuated against a basket of six major currencies, after touching a 15-month high.

As of June 1, hedge funds and other large speculators cut net-long positions in hogs, or bets for a price increase, by 39% from a record on May 4, government data show. Speculative net-long positions in cattle plunged 26% from a record on April 20.