By Whitney McFerron
Nov. 20 (Bloomberg) -- Hog futures rose the most since August on signs that animal deliveries to U.S. pork processors are slowing, easing concern that output gains may leave a glut. Cattle prices rebounded from a two-year low.
Meatpackers processed 2.31 million hogs last week, down 2.6 percent from a year earlier, government data show. Hog slaughter may be slowing because Canada is shipping fewer animals to the U.S., where the law since Sept. 30 requires meat to be labeled by national origin, said Jim Clarkson, an analyst at A&A Trading Inc. in Chicago.
``Hogs coming in from Canada have slowed down'' because of that new legislation, Clarkson said. ``It's not that supplies are tight. They're just not as big as people had forecast.''
Hog futures for February settlement jumped 1.775 cents, or 2.8 percent, to 64.675 cents a pound on the Chicago Mercantile Exchange, after touching 64.975 cents, the highest for a most- active contract since Sept. 30. The percentage gain was the biggest for a most-active contract since Aug. 6. Hogs have gained 12 percent this year.
Country-of-origin labeling is a longtime goal of U.S. farmers and ranchers convinced that identifying imported food will encourage manufacturers to use fewer imported products. On Sept. 24, Smithfield Foods Inc. said it will slaughter only domestic pigs at its U.S. plants, partly because of the new law.
Lower Prices, Bigger Herd
Hog shipments fell as the price of wholesale pork plunged 40 percent through yesterday from Aug. 15, and as the U.S. herd expanded to 68.657 million hogs on Sept. 1, the highest ever for that date, according U.S. Department of Agriculture data.
Wholesale pork declined 0.26 cent, or 0.5 percent, to 56.44 cents a pound yesterday, according to the USDA. The price is down 9.2 percent this month and this week reached a seven-month low.
Futures may fall next week because cash-market hogs are trading at a discount to the near-term December contract, Clarkson said. Cash hogs fell 0.81 cent, or 1.6 percent, to 49.64 cents a pound yesterday, according to the most recent USDA data. December futures, which rose 1.6 percent to 56.8 cents today, may fall as much as 4 cents next week, Clarkson said.
Cattle Markets
In another livestock market, cattle futures rose for the first time in more than a week on speculation that an earlier decline to the lowest since August 2006 was exaggerated. Analysts estimate that a USDA report tomorrow will show that the feedlot herd is shrinking, which may support prices.
U.S. feedlot operators may have reduced purchases of young cattle in October by 9.7 percent from the previous year, according to the average forecast of 10 analysts surveyed by Bloomberg News. The USDA will release its monthly feeder cattle report at 3 p.m. tomorrow in Washington.
``We've got a friendly cattle-on-feed report Friday,'' said Troy Vetterkind, owner of Vetterkind Cattle Brokerage in Chicago. ``We beat the market up so bad since last week. I would think that at some point in time we'd see some short covering, and apparently this is the day.''
Cattle futures for February delivery gained 1.375 cents, or 1.6 percent, to 86.525 cents a pound in Chicago. The price earlier tumbled to 83.8 cents, the lowest since Aug. 4, 2006. The most-active contract has slumped 6.7 percent this month.
Feeder-cattle futures for January delivery declined 0.1 cent, or 0.1 percent, to 89.75 cents a pound in Chicago. Earlier, the price sank to 87.6 cents, the lowest for a most- active contract since April 8, 2004. The price has slipped 8.5 percent this month.
Purchases Reduced
Feedlots may have cut purchases to 2.452 million head of cattle last month from 2.716 million a year earlier, after losing money for 17 straight months and as a slumping global economy raised concern beef demand will fall, the survey showed.
The price of wholesale choice beef rose for the 15th time in 16 days, gaining 0.33 cent, or 0.2 percent, to $1.5855 a pound at midday today, according to the USDA. Beef is up 11 percent this month on speculation retailers are increasing purchases in anticipation of a jump in U.S. demand for the Christmas and New Year's holidays.
To contact the reporter on this story: Whitney McFerron in Chicago at wmcferron1@bloomberg.net.
Posts
No comments:
Post a Comment