Hog futures started the week lower as large supplies strained the market.
October lean hog contracts at the Chicago Mercantile Exchange fell 1.6% to 60 cents a pound on Monday. Analysts said 60 cents was important technical support.
Continue Reading Below
Prices rallied Friday, but supply concerns are limiting gains. Average hog weights rose faster than normal in recent weeks, in part because of cooler late summer temperatures, and market participants expect them to continue high for the remainder of the year.
The U.S. Department of Agriculture, meanwhile, said the number of hogs slaughtered last week jumped to 2,432,000 from 2,315,000 two weeks earlier, the last full week of production. Two new packing plants that opened in September have created additional slaughter capacity, but analysts say it could be several months before that starts to dent supplies.
?This together means analysts see little prospect of a breakout in cash prices for slaughter-ready hogs. Prices have fallen around 30% over the past month, and were expected a further 50 cents to $1.50 lower on Monday.
Wholesale pork prices were a bright spot for those betting on a turnaround, however. Pork belly prices in particular were higher, up $4.74 to $106.37 per 100 pounds on Monday morning.
Cattle futures were mixed. The front-month contract traded higher for much of the session before turning lower. CME October live cattle futures fell 0.2% to $1.07575 a pound.
Meatpackers bought over 105,000 cattle last week for an average of $105.83 per 100 pounds live and $166.47 per 100 pounds dressed, according to the USDA, mostly $1 higher than a week earlier.
Analysts said firmer cash market prices should help steady futures as traders gear up for the number of slaughter-ready cattle to ease early next year.
Write to Benjamin Parkin at firstname.lastname@example.org
(END) Dow Jones Newswires
September 18, 2017 16:07 ET (20:07 GMT)