Lean hog futures also fell broadly as fading cash prices for animals continue to suggest front-month futures might be overpriced.
October hog contracts fell 2 cents, or 2.2%, to 87.4 cents a pound at the Chicago Mercantile Exchange. December hogs fell 1.45 cents, or 1.7%, to 84.22 cents a pound.
October contracts occupy a rather precarious position since they currently trade at a roughly 19-cent discount to cash prices, but also considerably higher than the highest October expiration price in history. Both gaps are important, since futures and cash prices typically converge as a contract nears expiration.
Cash prices for animals, for their part, have fallen steadily over the last week and continued that fall on Wednesday. The gathering downward momentum in cash prices in turn fueled selling on Wednesday that sent October contracts past their 100-day moving average, a key indicator.
Cash prices have been falling in part because slaughter-ready hog supplies are expected to undergo a seasonal expansion through the balance of the summer and fall. Average weights of animals will increase as well with the arrival of cooler temperatures, which hogs prefer, and which translates into greater feed consumption and weight gains than during the heat of the summer. Producers also typically grow more animals to meet a seasonal rise in consumer demand for meat.
Cash hog prices on Wednesday were reported steady to as much as $1 per hundredweight lower, in part because the weights of slaughter-ready animals are again on the rise due to cooler summer temperatures as compared with July.
Average weights for barrows and gilts, or young slaughter hogs, in Iowa/southern Minnesota last week nudged 0.2 pound higher from a nearly three-year low hit the previous week. The increase, although small, could be a signal of a coming rebound in weights following a steep decline during the heat wave that was encamped over much of the western corn belt and parts of the eastern half in late July and early August.
The terminal markets traded steady to $1 per hundredweight lower on a live basis with top prices from $69 to $72 per hundredweight on a live basis.
The USDA's pork carcass composite value, a measure of wholesale prices, on Tuesday fell $2.00 to $107.45 a hundred pounds.