Lean hog futures also rose Friday as traders squared books and covered short positions after prices for both cash hogs and future contracts spiraled downward this week.
October hog futures rose 0.62 cent, or 0.7%, to 85.80 cents a pound in trading at the Chicago Mercantile Exchange. CME December hog futures rose 1.1 cent, or 1.3%, to 83.10 cents a pound.
Traders bid up prices for futures after they had fallen 5% in less than two weeks of trading as cash prices for animals fell and producers boosted seasonal production more quickly than expected.
Cash prices recently have been falling more than 1 cent a pound per day, dealers said, as producers tried to capitalize on historically high pork prices and beat to market a widely expected seasonal decline in prices. That rush to sell, they said, pressured prices into suprisingly severe drops in the last two weeks. Producers typically boost production beginning in late summer as cooler temperatures make for more efficient hog-raising conditions.
Cash hog bids were reported $1 to $2 per hundred pounds lower on light buying interest ahead of the Labor Day holiday weekend and the seasonal supply growth.
The direct hog markets remained under pressure Friday in light activity as processors are said to be flush with supplies through next week and the first part of the following week, according to livestock dealers and market managers. Prices were steady to $2 lower.
The weekend slaughter is projected at 45,000 to 50,000 head, and the week's total is around 2.125 million to 2.130 million. The slaughter this week a year ago was 2.121 million. Weekly slaughters are expected to grow further into the fall. The largest weekly figure in 2010 was 2.344 million, hit in mid-December.