Lean hog futures also fell Wednesday after softer cash prices pointed to a steady seasonal rise in supplies.
October hog futures dropped 1.17 cents, or 1.3%, to 87.05 cents a pound in trading at the Chicago Mercantile Exchange. CME December hog futures fell 0.87 cent, or 1%, to 83.45 cents a pound.
Hog futures traders are at the moment extra-attentive to cash prices since the front-month October contract currently trades at a discount that is far wider than usual--about 16 cents. The spread is important because futures converge with cash prices when a contract nears expiration--for October, about seven weeks away. Despite their discount, October futures remain more than 8 cents above their highest-ever historical expiration prices, in part because prices for pork and hogs are falling from record highs in July and August.
Cash prices are falling quickly in part because the U.S. pork industry is entering a season of expanded supplies. Hog producers typically turn up their production in late summer as cooler weather makes for more efficient hog-raising.
Cash hog prices were reported weak to $1 per hundredweight lower. Buyers were bidding mainly for deliveries next week.
This week's slaughter was projected to be around 2.120 million head, near unchanged from a year ago.
The terminal markets traded steady with top prices from $65 to $70 per hundredweight on a live basis.
The USDA's pork carcass composite value, a measure of wholesale prices, on Tuesday was down $1.12 at $105.57 a hundred pounds.
The USDA reported average hog weights in Iowa/southern Minnesota last week up 1.5 pounds from previous week, likely the beginning of a seasonal uptrend.