By Joanna Levin
THIS was a week of continued worry for US pig farmers, with further losses registered in the futures market.
Pig producers face severe oversupply, despite the availability of cheaper feed due to collapsing grain prices.
On the Chicago Mercantile Exchange, futures prices hit contract lows on Tuesday (July 21), but managed to stage a small recovery in the afternoon.
The August lean hogs futures contract settled at 49.77¢/lb, a loss of 0.20¢ from Monday and a drop of 50.70¢/lb on the week. The contract has fallen rapidly from a peak of just over 60¢/lb in mid-June and is fast approaching its February lows.
Meanwhile, the August pork bellies contract managed to firm up on the back of strength in the cash bellies market. Prices climbed to 55.60¢/lb on Tuesday, a 3¢ gain on last weeks close of 52.47¢/lb.
Live hogs are currently trading in the cash market at 37.50-38.50¢/lb at the terminals, up from an average of 33.50¢ a week ago but still below the 39¢/lb level seen in early July.
Hogs prices in Iowa and Minnesota have increased in value from 33¢/lb to 36.50¢/lb.
Analysts say the recent recovery in the live market is partly due to renewed willingness on the part of packers to pay up for slaughter animals.