Hog Prices Drop From 24-Year High on Signs Rally Was Overdone

Hog futures fell from the highest price in at least 24 years on signs that the rally was overdone.

The price has jumped 31 percent in the past year, reaching 92.125 cents a pound today, the highest for a most-active contract since at least 1986. The market became “overbought,” said Tom Cawthorne, the director of hog marketing at R.J. O’Brien & Associates in Chicago.

“We just kind of ran out of buyers,” Cawthorne said. “We’ve had such a big run-up. We’ve seen a lot of spreaders liquidating out of their positions” on April contracts and summer prices, he said.

Hog futures for April settlement fell 0.1 cent, or 0.1 percent, to settle at 90.025 cents a pound at 1 p.m. on the Chicago Mercantile Exchange. Yesterday, the commodity gained 3 cents, the most allowed by the CME.

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