Lean-hog futures fell again Tuesday as cash prices failed to stabilize, adding to a weeks-long run of declines.
October hog futures fell 2.45 cents, or 2.9%, to 83.85 cents a pound in trading at the Chicago Mercantile Exchange. CME December hog futures fell 1.85 cents, or 1.9%, to 81.25 cents a pound.
Brokers described a widespread reluctance among investors to take new long positions in hog futures until cash prices for hogs stabilize. Wholesale prices have been falling at a faster-than-expected rate since mid-August, when supplies began to rise seasonally. Hog producers typically boost production in late summer as cooler weather makes for more efficient hog-raising conditions.
The USDA's pork carcass composite value, a measure of wholesale prices, on Friday was down 75 cents at $94.60 a hundred pounds, the lowest since June 16.
As supplies have climbed steadily on an eventual estimated 17% increase between August and November, prices have often fallen at the rate of 1 cent a pound or more per day, in part because producers have rushed to sell. Analysts have been waiting for prices to stabilize on a seasonal basis, as they some times do in September, as autumn grilling becomes more popular.
Cash hog bids were reported 50 cents to $1.50 per hundred pounds lower on limited buying interest following Monday's Labor Day holiday. Larger slaughter-ready hog supplies along with faster growth rates in the animals due to increased feed intake and cooler temperatures contributed to the lower cash prices.
Terminal markets traded from steady to $2 per hundredweight lower on a live basis with top prices from $55 to $58.
Early projections for Saturday's slaughter range from 260,000 to 270,000 head but are subject to adjustments as the week progresses.