U.S. lean hog futures cooled off for the first time in days Friday as pork prices slipped from record highs and cooler weather in the Midwest is likely to boost supplies.
CME August hog futures closed down 0.62 cent, or 0.6%, at $1.0492 a pound in trading at the Chicago Mercantile Exchange. CME October hog futures were lower by 0.97 cent, or 1%, at 91.85 cents a pound.
Futures fell after wholesale pork prices Thursday failed to set a fresh record high for the first time in seven days. The USDA's pork carcass composite value, a measure of wholesale prices, slipped 21 cents to $108.10 after hitting an all-time high on Wednesday at $108.31 a hundred pounds. Until Friday, the front-month hog contract also posted record-high closing prices for four straight days.
The U.S. pork industry has been dining on the combination of tighter supplies and soaring export demand from other countries, most notably China, where food prices have spiralled upward in the last year. China consumes more pork than any other country.
At the same time, a just-ended heat wave in the Midwest made it hard for hogs to gain weight in recent weeks, which led to lighter animals sold for slaughter, tightening supplies in the process. Some producers delayed their selling to give animals time to grow, which further tightened supplies.
Now that the heat wave has broken, analysts said, the average weight of for-sale hogs will rise again, boosting supplies. Portions of Iowa and Minnesota are enjoying milder weather after temperatures hit 100 degrees Fahrenheit and hotter last week and prior.
Cash hog prices were reported mostly steady in light trading. Producers were offering few loads for sale in the spot markets. Packers were scheduling additional loads for arrival next week.
The terminal markets traded steady to $1 a pound higher, with tops from $70 to $75 a hundred pounds on a live basis.