Hog futures drop to six-month low
In the wake of falling prices and volatile markets comes word that hog futures have dropped to a six month low, sparked by speculation that pork supplies will increase as producers turn to cheaper corn to feed their animals.
October 1, 2008 By Calgary Herald
October 1, 2008
Hog futures dropped to a six-month low on speculation that pork supplies will increase as producers feed animals more on cheaper corn. Cattle gained.
Corn, the main ingredient in hog feed, dropped for a fourth straight session, touching the lowest in eight months. The average weight of hog carcasses for the week ended Sept. 26 was 198.94 pounds, 0.9 per cent, or 1.7 pounds more than for the week ended Sept. 5, government data show.
"Cheaper corn means people are going to feed more hogs to heavier weights," Dave Bauer, president of Brite Futures Inc. in Milwaukee, said today in an interview. "Corn down 25 cents, that has as much impact on hogs as anything."
Hog futures for December settlement dropped 0.85 cent, or 1.3 per cent, to 64.2 cents a pound on the Chicago Mercantile Exchange. Earlier, the price reached 63.65, the lowest since March 12. The price dropped 7.7 per cent this month, including 3.2 per cent in the past five sessions. The most-active contract still has climbed 11 per cent this year.
Corn futures for December delivery touched $4.855 today on the Chicago Board of Trade, and grain plunged a record 36 per cent in the third quarter.