New York, NY - Cattle and pork prices closed sharply lower Friday as swollen domestic supplies in the United States continued to push meat values to the lowest levels in years.
At the Chicago Mercantile Exchange, futures prices of lean hogs for delivery in December fell 0.70 cent a pound to 29.925 cents, setting a life-of-contract low. Cash hog prices in the U.S. Midwest this week have tumbled to 27-year lows, trading as low as 14 cents a pound as heavyweight hogs flood into slaughterhouses.
The weakness in pork prices also weighed on beef prices. December live cattle closed 0.55 cent a pound lower at 61.70 cents. The contract set a 10-week low Friday.
After the close, the U.S. Agriculture Department reported this week's total estimated hog slaughter at 2.173 million head, which analysts called a new record high for a second consecutive week.
Marketings of hogs in the key Iowa-Southern Minnesota region set a one-day record of 144,000 head twice this week. The average hog weight there for the week ended November 14 hit a record 261.1 pounds, up from the previous record of 260.4 pounds set last week.
The mountain of pork was confirmed Friday afternoon in the government's monthly report on cold storage, which showed 412.8 million pounds of pork were in cold storage on October 31, a record for that date and up 17 percent from last year.
“It is not a shock,” said Chuck Levitt, senior livestock analyst with Alaron Trading Corp. “It just reinforces that we have more pork in storage at this time than at any time in history.”
Cheap prices for corn and other feed supplies have fed a large expansion of livestock herds this year despite slower exports to once-booming Asia and other key destinations such as Russia.
Beef supplies in storage also rose to 358.8 million pounds on November 1 from 323.1 million a month earlier.
U.S. pork producers, facing the biggest squeeze on their incomes in decades, asked President Clinton Friday to limit imports of Canadian hogs.
“Losses are of such historic proportions that if this dangerous situation is not reversed quickly, it will result in the failure of tens of thousands of pork producers and a massive restructuring of pork production in the United States,” Donna Reifschneider, an Illinois pork producer and head of the National Pork Producers Council, said in a letter to Clinton.
“We believe the economic crisis facing America's pork producers must be viewed as a national emergency, warranting immediate intervention by the U.S. government,” she said.
Grain prices, also hovering just above the lowest levels in years, also fell Friday, led by weakness in the wheat market. December wheat at the Chicago Board of Trade closed 5-1/2 cents a bushel lower at $2.85-1/2, with improved crop prospects overseas and slow export sales pressuring values.
Farmer sales of newly harvested corn and soybeans remained slow, but prices fell anyway. December corn closed 1/4 cent a bushel lower at $2.20 and January soybeans 1-1/2 cents a bushel lower at $5.80-1/2.
Oil prices marked time ahead of the Organization of Petroleum Exporting Countries meeting in Vienna next week. Crude oil bounced near 12-year lows this week around $11.40 a barrel, but traders are awaiting any last-ditch agreements that OPEC might reach to cut the current global glut of oil.
At the New York Mercantile Exchange, crude oil for January delivery ended 15 cents a barrel higher at $12.89. January gasoline rose 0.27 cent a gallon to 39.30 cents, and January heating oil rose 0.08 cent a gallon to 36.32 cents.
Meat Industry Insights News Service
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Phone: 631-757-4010
Fax: 631-757-4060
E-mail: sflanagan@sprintmail.com
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