CHICAGO (Dow Jones)--U.S. lean-hogs futures fell Monday as corn futures fell and traders speculated that an ongoing heat wave will deter consumers from grilling meat.
Hogs futures for August fell 1.35 cents, or 1.4%, to 97.6 cents a pound in trading at the Chicago Mercantile Exchange. October hog futures fell 2.15 cents, or 2.4%, to 89.5 cents a pound.
Hot, humid weather in much of the U.S. is expected to weigh on consumers' interest in grilling meat, which will boost inventories and weigh on wholesale prices.
Hogs futures were also pressured by a decline in the price of corn futures. Corn for September was down 1.75% to $6.89 a bushel in trading at the Chicago Board of Trade. A decline in corn prices often weighs on hogs futures since producers have fewer costs to pass on to meat packers. Lower corn prices can also encourage producers to grow their herds.
A prolonged heat wave could eventually shrink supplies. Hogs lose much of their appetites as temperatures rise, which means many are smaller when they enter slaughterhouses.
"As the heat wave spreads across multiple states, keep an eye on hog and cattle weights and the resulting impact on overall protein supplies," said Steve Meyer and Len Steiner in a Monday CME Daily Livestock Report.
Cash-hog prices were expected to be mostly steady to higher at some locations. Extremely hot temperatures forecast for most of the Midwest this week will cause hogs to eat less and result in slower weight gains, said livestock dealers and analysts. The heat and humidity also lead to more stress on the animals during transport to processing plants, increasing the risk of death losses.
If daily weight gains are reduced, some producers may wait until later in the week or early next week before selling additional hogs.
Analysts predict Monday's hog slaughter to be around 387,000 head.
The U.S. Department of Agriculture's carcass composite value, a measure of wholesale prices, Friday rose $1.41 to $100.07 a hundred pounds, the highest since June 27.
The latest Dow Jones Newswires pork packer margin index was plus $10.40 per head, compared with plus $7.26 the previous day.
Terminal markets were expected to trade mostly steady, with top prices ranging from $63 to $65 a hundred pounds.
The latest CME two-day lean-hog index, calculated using USDA market data, for Thursday was down 0.30 cent to 95.23 cents a pound.