Hog futures headed for the biggest drop in almost two weeks after a government report showed the U.S. herd increased more than analysts expected, indicating more pork supplies. Cattle prices also declined.
The hog herd totaled 65.911 million on March 1, up 1.5 percent from 64.937 million a year earlier, the U.S. Department of Agriculture said in a report released after the close of Chicago futures trading on March 28. Analysts surveyed by Bloomberg had projected a 0.8 percent increase.
“There’s a little bit larger supplies than everybody’s expecting,” Jason Golly, a vice president of risk-management marketing at Lynch Livestock Inc. in Waucoma, Iowa, said in a telephone interview.
Hog futures for June settlement dropped 0.7 percent to 90.4 cents a pound at 10:06 a.m. on the Chicago Mercantile Exchange. A close at that price would mark the biggest decline for the most-active contract since March 19.
Cattle futures for June delivery fell 0.3 percent to $1.24025 a pound on the CME. Through March 28, the commodity declined 6 percent this year.
Feeder-cattle futures for May settlement rallied 1.4 percent to $1.47075 a pound, after reaching $1.47625, the highest since March 5.
Corn futures plunged as much as 6.4 percent to $6.51 a bushel on the Chicago Board of Trade, the lowest for a most- active contract since July 2. The USDA said on March 28 that domestic inventories were bigger than analysts forecast and that farmers will plant the most since 1936.
“Certainly the feed inputs are going to be much more reasonable,” Dennis Smith, an analyst at Archer Financial Services, said in a telephone interview. “That’s injected the enthusiasm.”
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