U.S. livestock futures fell Wednesday as wholesale meat prices suggest a summer heat wave is shrinking consumer demand for meat.
August lean hogs futures were down 1.8 cents, or 1.8%, at 97.85 cents a pound at the Chicago Mercantile Exchange. October hogs contracts were down 1.27 cents at 90.4 cents a pound.
Traders were spooked by a drop in the price of pork, which points to easing consumer meat demand and a lack of buying by China. China has signaled it could import more pork to contain fast-rising food prices there.
"The Chinese don't have to do anything in the next three weeks," said Steve Wagner at brokerage Country Hedging. Even if they move to buy pork soon, he said, they're not necessarily going to take delivery of it right away.
The U.S. Department of Agriculture's carcass composite value, a measure of wholesale prices, on Tuesday fell $1.08 to $99.30 a hundred pounds.
The National Weather Service on Wednesday described a "deadly" ongoing heat wave across much of the U.S., and said portions of the Midwest and Plains won't see relief soon. Consumers tend to grill less meat when temperatures rise, and also eat lighter foods.
Corn contributed to the pressure and closed down 1.4% at $6.88 a bushel at the Chicago Board of Trade. Lower corn prices typically weigh on cattle futures since producers have fewer costs to pass on to meat packers. Lower feed prices also encourage producers to grow their herds, which boost supplies.
Cash hog prices were reported mostly steady. Some processing plants were seeking more hogs to fill this week's slaughter schedules but the heat wave and humid conditions contributed to light selling interest.
Average hog weights are expected to decline since the heat is causing the animals to consume less feed and slowing daily weight gains. Some producers may delay selling additional hogs for a few days to give the animals more time to gain weight. Others may have to ship the hogs out anyway even if they are lighter than desired to make room for the next group of young pigs scheduled to arrive, livestock dealers said.
The terminal markets traded mostly steady to up $1 with top prices from $63 to $67 a hundred pounds on a live basis.