Commodities : Thursday, Sept. 17, 1987 : Live Hog Futures Plummet
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Live hog futures plummeted near the close of trading at the Chicago Mercantile Exchange Thursday, pressured by unexpectedly high numbers of animals being brought to market.
On other futures markets, grains and soybeans were mostly lower, precious metals advanced and energy futures declined.
Analysts said wet weather in the Midwest may have played a major role in the decline in pork futures as hog-and-grain farmers, unable to harvest, decided to bring hogs to market instead.
The result was more animals sold and slaughtered Thursday than traders had expected, “so all of a sudden they’ve got too many hogs for the demand,” said Tom O’Hare, an analyst at Smith Barney, Harris Upham & Co. in New York.
“If you get some clearing (in the weather), that may slow them down a bit,” O’Hare said. “Then these farmers will be harvesting.”
Hog futures opened mixed, then fell throughout the day to settle near session lows. Frozen pork bellies followed the hogs lower.
Live cattle futures continued downward, mostly on selling by brokerage houses, after opening lower in follow-through selling from Wednesday’s steep losses.
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