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Hog futures posted their biggest gain in more than a week on speculation that lower temperatures in the U.S. Midwest are easing a heat wave that slowed pork demand for outdoor grilling. Cattle prices dropped.
Weather in most parts of the Midwest will be in the 80s Fahrenheit this week, as much as 20 degrees below the peak readings last week, Joel Widenor, a vice president at Commodity Weather Group LLC in Bethesda, Maryland, said in a telephone interview. The heat last week set or tied 1,067 temperature records, government data show.
“Vastly improved temperatures” may “give a shot in the arm to meat demand,” said Dennis Smith, a senior account executive at Archer Financial Services Inc. in Chicago, said in a telephone interview.
Hog futures for August settlement rose 0.7 percent to settle at 93.95 cents a pound at 1 p.m. on the Chicago Mercantile Exchange, the biggest gain since June 29. Prices are up 11 percent this year.
Today, corn futures surged to the highest price since September as hot, dry weather menaced the U.S. crop. That’s a bullish sign for forward hog prices because the grain is the primary ingredient in livestock feed, Doug Houghton, an analyst at Brock Associates, an agricultural commodity advisory firm in Milwaukee, said in a telephone interview.
Corn’s 44 percent rally since June 15 will make raising hogs more expensive next year and may curb expansion or lead to liquidation of animals, Houghton said.
Cattle futures for August delivery fell 0.1 percent to settle at $1.1905 a pound in Chicago, after reaching $1.184, the lowest since June 28. The commodity has dropped 2 percent this year.
Feeder-cattle futures for August settlement declined 1.5 percent to settle at $1.44275 a pound on the CME. Earlier, the price touched $1.436, the lowest for a most-active contract since Dec. 16.
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