September 29, 2010

US hog futures fall on rising supplies

Hog futures fell for the first time in three days as spot-market prices dropped, signalling that the supply of animals to US meatpackers may be outpacing demand.

The price of hogs for immediate delivery to slaughterhouses dropped to 78.68 cents a pound earlier, a three-week low, USDA data show. About 2.21 million hogs were processed last week, up 1.9% from a week earlier. Pork supplies tend to increase from August to December, based on animal breeding cycles and as cooler weather boosts hog weights.

Hog futures for December settlement dropped 1 cent, or 1.3%, to 75.775 cents a pound at 12:02 p.m. on the CME. A close at that price would be the biggest decline since September 7. Earlier, the price gained 17% this year.

Meanwhile, cattle futures for December delivery were unchanged at 99.3 cents a pound, fluctuating between gains and losses. As of Monday (Sep 27), the commodity climbed 15% this year. Feeder- cattle futures for November settlement advanced 0.5 cent, or 0.5%, to US$1.10275 a pound.

Cattle futures earlier rose to a one-week high as the dollar slipped, boosting prospects for US meat exports.

The dollar extended a slide to the lowest level since February against a basket of six major currencies. US exporters sold 14,274 tonnes (31.5 million pounds) of beef in the week ended September 16, more than twice as much as a week earlier, the most recent data from the USDA show.

Concern over beef demand in the US pared gains, said Rich Nelson, the director of research at Allendale Inc. in McHenry, Illinois.

Wholesale choice beef prices are down 3.6% this month. US consumer confidence fell in September to the lowest level in seven months, indicating slowing economic recovery, the Conference Board said today. Meatpackers processed 128,000 heads of cattle yesterday, or 4.9% more than the same time last year, USDA data show.