U.S. lean hogs futures were mostly down sharply Wednesday as demand signals softened and supplies were expected to grow.
August hog contracts, which expire Friday, settled up 0.87 cent, or 0.8%, to $1.0627 a pound in trading at the Chicago Mercantile Exchange. CME October hogs closed down 2.27c, or 2.5%, to 86.85 cents a pound. December contracts fell 2.6% to 83.65 cents a pound.
Futures were pressured by growing concerns that a seasonal growth in supplies could pair with shrinking meat demand if euro-zone and U.S. economies weaken further and pull down markets. Analysts also say China will eventually succeed in boosting its own domestic pork production to curb inflated pork prices there.
Cooler summer weather in the Midwest will eventually lead to bigger hogs for sale, even though weights of slaughter-ready animals in the Iowa-Minnesota market are still six pounds below a year ago.
"Seasonally, the fourth quarter is not that great. You tend to have larger supplies," said Alton Calo, analyst at Steiner Consulting Group. He said investors are also concerned that demand could shrink sharply if China stops importing more pork.
Hog traders also paired gains and squared their books ahead of a key U.S. government corn report Friday. Lower corn prices often weigh on hog futures since producers have fewer feed costs to pass on to meat packers.
Traders in part reacted to growing signs that a long rally in cash prices for hogs and pork has reached its end.
Cash hog prices were reported flat to $1.50-a-hundredweight lower on softer buying interest as processors anticipate the seasonal expansion in supplies. The number of hogs available for slaughter is expected to grow during the second half of August and continue to gradually expand through the late fall.
Export sales will need to remain strong to absorb the larger amount of pork expected to be produced, analysts said.
The terminal markets traded mostly steady with tops from $70 to $74 a hundred pounds on a live basis.
The USDA's pork carcass composite value, a measure of wholesale prices, on Tuesday fell 66 cents to $109.53 a hundred pounds following a record high Monday -- the ninth record in 10 days -- at $110.19 a hundred pounds.