Soybeans Drop as Tyson Hog-Herd Cuts May Reduce Demand for Feed

July 15 (Bloomberg) -- Soybeans fell the most in a week on concern demand for livestock feed will drop after Tyson Foods Inc., the world’s largest meat producer, said it will sell five farms and reduce its hog-breeding herd by 29 percent.

About 20,000 sows will be slaughtered in the next 10 weeks, leaving 50,000, Gary Mickelson, a spokesman for Springdale, Arkansas-based Tyson, said today in an e-mail. The company also is selling five farms in Arkansas and Missouri because of weak pork demand, he said. A bushel of soybeans weighing 60 pounds (27 kilograms) produces about 48 pounds of animal feed, according to Chicago Board of Trade estimates.

“The Tyson announcement hit the market hard,” said Gregg Hunt, an analyst for Fox Investments in Chicago. “The fear is this could be the start of a larger herd liquidation in the U.S.”

Soybean futures for November delivery fell 13.5 cents, or 1.5 percent, to $9.045 a bushel on the CBOT. Earlier, the price rose as much as 2.2 percent to $9.38, the highest since July 7. Soybeans are down 7.7 percent this year as beneficial weather in the past month boosted yield prospects after rain delayed U.S. planting.

The U.S. soybean crop was valued last year at $27.4 billion, the second-largest behind corn, government figures show.