Hog futures fell, capping the biggest weekly loss in three years

Hogs Post Biggest Weekly Drop in Three Years; Cattle Decline
2009-07-24 19:29:06.238 GMT


By Whitney McFerron
July 24 (Bloomberg) -- Hog futures fell, capping the biggest weekly loss in three years, on signs that favorable U.S.
weather is allowing animals to gain more weight, boosting prospects for pork supplies. Cattle also declined.
U.S. hog carcasses weighed an average 201 pounds (91
kilograms) yesterday, 2.6 percent more than a year earlier, Department of Agriculture data show. Unusually low temperatures in the Midwest this summer prevented heat stress, which usually causes hogs to lose weight, said Lawrence Kane, a market adviser at Stewart-Peterson Group in Elmwood, Illinois.
“We’re adding a tremendous amount of pork,” Kane said.
“The cool summer is making some very rapid efficiency gains,”
and slaughter rates are declining because of slackening meat demand, he said.
Hog futures for October settlement fell 1.825 cents, or 3.2 percent, to 54.575 cents a pound on the Chicago Mercantile Exchange. Earlier, the price touched 54.2 cents, the lowest for a most-active contract since Nov. 5.
The global recession and the outbreak of swine flu in late April have eroded pork consumption. This week, futures tumbled
9.9 percent, the most since July 2006. About 578.8 million pounds of pork were in cold-storage warehouses on June 30, up
9.2 percent from a year earlier, the USDA said July 22.
Temperatures in Iowa, the largest hog-producing state, averaged 7.6 degrees Fahrenheit below normal last week, the USDA said in a July 20 report. The July 13 to July 19 period was the state’s coolest on record, the agency said.