U.S. livestock review: Hogs mixed on supplies, commodities

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Lean hog futures also mostly succumbed to the day's broad swoon in commodities as traders squared positions ahead of a USDA hogs-and-pigs report due in the afternoon after trading.

October hog futures rose 0.15 cent, or 0.2%, to 88.77 cents a pound in trading at the Chicago Mercantile Exchange. CME December hog futures were flat at 83.47 cents a pound.

The hog complex has been supported in recent days by the forecast for tighter supplies of beef in winter and spring. Since beef supplies are already tighter than historical norms, which has led to resiliently high prices for products like steaks and roasts, some analysts say price-shocked beef eaters could increasingly turn to buying pork.

The Wednesday hogs-and-pigs report from the USDA is expected to show a 0.5% rise in the size of the U.S. swine herd on Sept. 1, as compared with a year earlier. Analysts also expect the report to show that a prolonged summer heat wave, most notably in hog-raising states like Iowa and Minnesota, weighed on reproduction rates. Hogs struggle in a variety of ways under hot, humid weather, from slower rates of gaining weight to lower rates of pregnancy for the herd.

Cash hog bids were reported mostly steady but some plants were quoting prices of 50 cents to $1 per hundredweight lower since they have sufficient supplies for this week's slaughter.

Total pork output is growing due to a seasonal expansion in supplies, more favorable hog-growing temperatures and the introduction of new-crop corn into feed rations. Average hog weights are moving up, as is typical for this time of the year. The U.S. Department of Agriculture reported the average weight for barrows and gilts last week in Iowa and southern Minnesota at 270 pounds, up 1.6 pounds from the previous week and 0.2 pound above a year earlier.

Price predictions for Thursday are steady to weak since processors will not need as many hogs this week compared with the past two weeks. Projections for Saturday's slaughter are mostly from 115,000 to 125,000 head, and the week's total is expected to be about 2.24 million. That would be down from an average of 2.288 million for the latest two weeks but still about 4.2% above a year ago.

The latest Dow Jones Newswires pork packer margin index was plus $12.94 per head, compared with plus $11.92 the previous day.

The terminal markets traded mostly steady to down $1 a hundred pounds on a live basis with tops ranging from $60 to $64.

The USDA's pork carcass composite value, a measure of wholesale prices, on Tuesday fell 40 cents to $97.41 a hundred pounds.



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