090137 Hogs Drop on Weak Demand for U.S. Pork

(Bloomberg) -- Hog futures fell on speculation that overseas demand for U.S. pork is shrinking. Cattle prices also declined.

U.S. meatpackers shipped 4.78 million pounds (2,170 metric tons) of pork to domestic and destinations abroad yesterday, the least for a Tuesday in more than a month, Department of Agriculture data show. U.S. suppliers exported 12 percent less pork in November than October, the USDA said last week. Exports were up 0.5 percent from November 2007.

"The trade has the perception of weak demand for pork right now," said Rich Nelson, a broker at Allendale Inc. in McHenry, Illinois. "November exports were equal to last year's level. The market is suggesting that we're slipping below last year's pace in our current exports."

Hog futures for April settlement fell 0.35 cent, or 0.5 percent, to 65.35 cents a pound on the Chicago Mercantile Exchange. The most-active contract still is up 7.4 percent this month.

Wholesale pork rose 0.49 cent, or 0.9 percent, to 57.91 cents a pound today, gaining for a fifth straight day, USDA data show. The price has climbed 4.7 percent this month.

Meatpackers shipped 119.6 truckloads of pork yesterday, the least for the second business day of the week since Dec. 16, USDA data show. Each truckload weighs 40,000 pounds. Pork exports in November totaled 344.7 million pounds, down from 392.4 million pounds in October. the USDA has said.

In another livestock market, cattle futures fell to a one- week low on speculation that beef demand is declining. Wholesale choice beef slipped 1.22 cent, or 0.8 percent, to $1.5175 a pound today, ending a nine-session rally, the USDA said.

Beef Shipments Drop

Meatpackers shipped 2.25 million pounds of choice cuts of beef yesterday, the least for the second business day of the week since July 1, according to USDA data. Shipments totaled 56.3 truckloads weighing 40,000 pounds each.

"This market is so focused on what it wants to believe, and what it wants to believe is the bearish demand story," Nelson said. "We're focused strictly on the economic situation."

Cattle futures for April delivery fell 0.15 cent, or 0.2 percent, to 85.2 cents a pound in Chicago. Earlier the price touched 84.5 cents, the lowest for a most- active contract since Jan. 12. The price is down 9.7 percent in the past year.

Feeder-cattle futures for March delivery fell 0.4 cent, or 0.4 percent, to 91.35 cents a pound.

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