October 6, 2010
 

Hog futures fall to seven-month low on abundant US stocks

Hog futures fell to the lowest level since February on signs that US pork supplies are outpacing demand.

On October 1, wholesale pork, or the cutout, reached the lowest level in nine weeks, USDA data show. Last week, the price of hogs for immediate delivery to meatpackers fell 5.9%, the most since January. On Sept. 30, the average US hog carcass weighed 1.4% more than a year earlier.

"We had cash and cutouts both lower on Friday," said Mark Schultz, the chief analyst for Northstar Commodity Investment Co. in Minneapolis. There is a tendency for the market to decline at this time of year because of heavier hogs, he said.

Hog futures for December settlement fell US$0.0975, or 1.3%, to settle at US$0.719 a pound at 1:05 p.m. on the Chicago Mercantile Exchange. Earlier, the price touched US$0.7175, the lowest level for a most-active contract since February 25. The commodity has climbed 9.6%in 2010.

On October 1, wholesale pork dropped 2.1% to US$0.8696 a pound, the lowest level since July 27, and hogs for immediate delivery fell 1.8% to US$0.7587 a pound. The average hog carcass in the US weighed 205.5 pounds (93.2 kilogrammes) on September 30, up from 202.6 pounds a year earlier, USDA data show.

Cattle futures for December delivery fell US$0.105, or 1.1%, to settle at US$0.973 a pound. Earlier, the price touched 97.1, the lowest level since September 9. The commodity has gained 13% this year.

At midday, wholesale choice beef declined 0.4% to US$1.5352 a pound, the lowest level since Aug. 11.

Feeder-cattle futures for November settlement dropped US$0.16, or 1.4%, to settle at US$1.10675 a pound. The price has advanced 15% in 2010.