COMMODITIES : Cold Weather Drives Pork Futures Down

Pork futures prices fell steeply Thursday as weather worries combined with other market forces to foreshadow a possible sharp increase in hog slaughters.

On other markets, cattle futures retreated; grains, soybeans, precious metals and energy futures all were mixed, and stock index futures moved lower.

On the Chicago Mercantile Exchange, prices for future delivery of hogs fell as much as 1.42 cents a pound and frozen pork belly contracts retreated as much 1.50 cents a pound as a ferocious winter storm added to other worries about increasing hog supplies, analysts said.

The heavy snow and bitterly cold weather in the Midwest was expected to temporarily slow the movement of hogs to market, creating a backlog of slaughter-ready animals.

Those hogs eventually will reach packing houses later this month along with an above-average number of newly maturing animals at a time when hog slaughters typically increase due to seasonal factors, said Chuck Levitt, an analyst in Chicago for the investment firm Shearson Lehman Hutton.

The outlook for hefty supplies means cash prices are likely to fall. So traders who had bid up the price of hog and pork belly futures in recent weeks by making commitments to buy those commodities rushed to offset those orders with contracts to sell.

The weather also influenced trading on the Chicago Board of Trade, where soybean futures finished sharply higher and the grains ended mixed.

Waiting for Report

Soybeans gained as much as 8.75 cents a bushel on higher prices for soybean meal linked to the storm and to higher meal prices in Europe, analysts said.

Subzero temperatures following the storm wake may increase demand for soybean meal among cattle and pork producers, who must feed their animals more in cold weather to prevent weight loss, analysts said.

“I believe the temperatures out in Iowa were the coldest there in two years, and that’s the sort of thing meal people like,” said Walter Spilka, an analyst in New York for Smith Barney, Harris Upham & Co.

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