August 31, 2010

US hog futures rise on export gain

Hog futures rose for the first time in a week as US pork exports increased and animal supplies fell.

Wholesale pork reached a record 96.74 cents a pound on August 24 and dropped 3.6% since then, US data show. A 3.1% decline in futures last week was overdone because demand remains ample, analysts said. In the first half of 2010, the US exported 7.9% more pork than a year earlier.

Hog futures for October settlement rose 0.05 cent to close at 74.875 cents a pound at 1 p.m. on the CME. The most-active contract has gained 14% this year after losses in 2008 and 2009 prompted farmers to slash herd sizes.

Meatpackers processed 2.11 million hogs last week, or 4.2% less than a year earlier, USDA data show.

Pork prices declined last week after grocers finished stocking up on meat for the US Labor Day holiday on September 6, when many people grill outdoors, according to analysts.

Meanwhile, cattle futures dropped, extending the longest slump in 10 months. Cattle futures for October delivery declined 0.05 cent to 98.05 cents a pound, dropping for the fifth straight session, the longest slide since late October. The most-active contract is up 3.6% this month.

Feeder-cattle futures for October settlement slipped 1.075 cents, or 0.9%, to US$1.15925 a pound.  Futures declined in tandem with US equities amid speculation that demand for beef will shrink.

Earlier, cattle climbed as much as 0.6% on speculation that US slaughterhouses will buy more animals as beef prices increase. Meatpackers processed 678,000 cattle last week, up 1.6% from a week earlier, USDA data show. Wholesale choice beef has climbed 7.8% this month to US$1.6374 a pound at midday.