U.S. hogs futures ended lower Monday as commodities fell broadly and concerns grew over demand sagging as supplies remain strong.
The broad commodity sell-off and concerns over bloated supplies pressured hog futures as well on Monday.
The July contract fell 1.85 cents, or 1.9%, to 94.15 cents a pound. The CME August contract fell 2.85 cents, or 3%, to 92.35 cents a pound. The CME October contract ended down 2.1 cents a pound, or 2.4%, to 86.57 cents a pound.
Contracts for the summer months experienced particular pressure after a USDA report from Friday, released after the trading day, showed a bigger-than-expected supply of hogs are likely to end up in slaughterhouses later this summer, analysts said. The report showed that inventories of hogs between 120 and 179 pounds, which will likely be killed from mid-July to mid-August, were 3% bigger than this time last year.
Cash hog bids were reported steady to as much as $2 a hundred pounds lower on slow buying interest. Pork processors were bidding cautiously ahead of the Independence Day holiday weekend. All of the large pork plants will be closed next Monday for the holiday. Reduced demand for the animals could weigh on cash prices this week.
The latest Dow Jones Newswires pork packer margin index was minus $6.00 per head, compared with minus $12.52 the previous day.
The USDA's pork carcass composite value, a measure of wholesale prices, on Friday was down 21 cents to $99.06 a hundred pounds.
The terminal markets traded mixed, from $1 a hundred pounds higher to $2 a hundred pounds lower with top prices from $66 to $70 a hundred pounds on a live basis.