August 3, 2010

US hog futures rise on sign of shrinking supply

Hog futures rose to a three-week high as US wholesale-pork prices climbed, signaling demand for the meat may be outpacing the supply of animals to slaughterhouses.

Wholesale-pork prices rose 9.8% last month to 89.82 cents a pound, the highest level since May 17, USDA data show. Meatpackers processed 1.96 million hogs last week, 7.3% fewer than a year earlier. The US hog herd was 3.6% smaller on June 1 than a year earlier, according to the most recent USDA herd-inventory report.

Hog futures for October settlement rose 0.925 cent, or 1.2%, to 79.95 cents a pound at 10:14 a.m. on the CME. Earlier, the price touched 80.075 cents, the highest for a most-active contract since July 9.

Earlier, futures surged 50% in the past year as farmers cut herds after high feed prices and the recession spurred losses in 2008 and 2009.

Meanwhile, cattle futures for October delivery rose 0.175 cent, or 0.2%, to 94.775 cents a pound. Last month, the price gained 5.1%, the most since July 2009. Feeder-cattle futures for September settlement fell 0.8 cent, or 0.7%, to $1.134 a pound.