Hogs Decline as U.S. Pork Consumption May Drop; Cattle Futures Advance

Hogs fell the most in more than twoweeks on speculation that a decelerating U.S. economy willreduce demand for pork. Cattle rose as hot weather in the GreatPlains may slow weight gains and reduce beef supplies.

U.S. housing starts declined in June to the lowest levelsince October following the expiration of a federal-taxincentive. Payrolls decreased in 27 states in June, led byCalifornia and New York, signaling a broad retrenchment in jobcreation, data from the Labor Department showed. Before today,wholesale pork prices increased 21 percent this year.

“The worries about the economy are weighing on consumerbuying patterns,” said Dale Durchholz, the senior marketanalyst for AgriVisor LLC in Bloomington, Illinois. “You simplyhave too many people out of work, and that’s a drag on meatdemand.”

Hog futures for October settlement fell 1.275 cents, or 1.7percent, to 74.5 cents a pound on the Chicago MercantileExchange, the biggest drop since July 2. The most-activecontract has risen 14 percent this year on higher export demand.

Cattle futures rose on speculation that temperatures above100 degrees Fahrenheit (38 degrees Celsius) in parts of thesouthern Great Plains this week will harm or kill livestock,said Mike Zuzolo, the president of Global Commodity Analyticsand Consulting Inc. in Lafayette, Indiana.

The average weight of steer carcasses in the eight largestproducing states fell 2.4 percent to 861 pounds in the weekended July 18 from 882 pounds a year earlier, the U.S.Department of Agriculture said yesterday in a report.

“The weather has already slowed weight gains, and thisweek’s heat is going to further tighten supplies,” Zuzolo said.“Beef supplies will be tightening in the short term.”

Cattle futures for October delivery rose 0.1 cent, or 0.1percent, to 94.5 cents a pound in Chicago, capping the firstsix-day gain since March. Earlier, the price touched 94.65cents, the highest level for a most-active contract since May14.

Feeder-cattle futures for August settlement rose 0.05 centto $1.14475 a pound.