October 28, 2010

US hog futures tumble on sagging demand

Hog prices slumped to an eight-month low on signs that US supplies are increasing amid waning demand.

In the week ended October 23, slaughtered hogs in Iowa and Southern Minnesota, the main producing region, weighed 0.5% more than a week earlier, USDA data show. The wholesale pork-cutout price, a gauge of consumer demand, Tuesday (Oct 26) fell to the lowest level since April as production continues to swamp the demand.

Hog futures for December settlement fell 0.825 cent, or 1.2%, to settle at 67.85 cents a pound on the Chicago Mercantile Exchange. Earlier, the price reached 67.35 cents, the lowest level for a most-active contract since February 11.

Wholesale pork dropped 1.1% to 75.14 cents a pound Tuesday, the lowest level since April 5. The price reflects a weighted average of cuts including bellies, ribs and hams.

Futures dropped as the dollar's rebound eroded the appeal of commodities. The greenback rose as much as 0.7% against a basket of currencies, and the Thomson Reuters/Jefferies CRB Index of 19 raw materials dropped as much as 1.4%.

Cattle futures for December delivery dropped 0.1 cent, or 0.1%, to settle at US$1 a pound. The price dropped for the third straight session, the longest slump in a month. The commodity has gained 16% this year.

Feeder-cattle futures for January settlement fell 0.15 cent, or 0.1%, to US$1.11775 a pound.