Hog futures dropped to a four-month low on speculation that U.S. meat processors will slow animal purchases after an increase in slaughter rates eroded pork prices. Cattle also declined.
A wholesale hog carcass weighing 200 pounds (91 kilograms) plunged 2.2 percent yesterday to 79.89 cents a pound, the biggest drop in three weeks and the lowest since Sept. 26, government data show. Meatpackers slaughtered 854,000 hogs in the first two days of this week, up 1.5 percent from a year earlier, according to the U.S. Department of Agriculture.
“Pessimism about pork demand and rising slaughter rates are a double negative for hogs,” Greg Grow, the director of agribusiness for Archer Financial Services Inc. in Chicago, said in a telephone interview. “Packer demand for hogs will slow until pork demand improves.”
Hog futures for April settlement declined 0.4 percent to 78.9 cents a pound at 9:53 a.m. on the Chicago Mercantile Exchange, after reaching 78.25 cents, the lowest for the most- active contract since Nov. 7. Prices are down 12 percent since the end of January.
Cattle futures for April delivery fell 1.1 percent to $1.282 a pound on the CME, heading for the biggest drop since Jan. 17.
Feeder-cattle futures for May settlement dropped 1.5 percent to $1.43975 a pound.
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