July 13, 2011
US hog, cattle futures drop on slowing demand
US hog and cattle futures slumped the most this month of July on signs of slackening US demand.
On Monday (Jul 11), spot-market hog prices fell 1.8% to US$0.9041 a pound, the lowest in four weeks, while futures jumped on speculation that China will import US pork to cap rising domestic meat prices, said Dax Wedemeyer, a broker at US Commodities Inc. in West Des Moines.
"We are seeing a little bit of softness in the cash market," said Doug Harper, an analyst at Brock Associates in Milwaukee. "Futures were sharply higher yesterday on talk of Chinese business. This is probably mostly a correcting pullback."
Hog futures for October settlement fell US$0.0055, or 0.6%, to settle at US$0.922 a pound at 1 p.m. on the Chicago Mercantile Exchange, the biggest drop for a most-active contract since June 30. The commodity has climbed 24% in the past 12 months.
According to Premier Wen Jiabao, China will seek to increase supplies of hogs to promote a stable market. Pork prices in June soared 57% from a year earlier, a government report on consumer prices showed on July 9.
Cattle futures for August delivery dropped US$0.00675, or 0.6%, to settle at US$1.14025 a pound on the CME. The price has gained 25% in the past year.
Feeder-cattle futures for August settlement declined US$0.01325, or 0.9%, to US$1.42025 a pound.