UPDATE 1-Pig virus shrinks U.S. hog herd, but low-cost feed limits decline

Fri Sep 26, 2014 5:41pm EDT
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* September 1 hog inventory at 8-year low

* July-Aug herd expansion biggest in 6 years

* Pigs per litter mend from winter PEDv spread

* Report seen bearish for CME hogs on Monday (Adds analysts' comments, background on pork/hog production)

By Theopolis Waters

Sept 26 (Reuters) - The U.S. hog herd continued to shrink during the June-August quarter as a deadly pig virus lingered on farms, but the decline was less than expected, a U.S. Department of Agriculture report showed on Friday.

The data also showed that producers least affected by the Porcine Epidemic Diarrhea virus (PEDv) added to their herds, encouraged by cheaper corn and higher prices for their animals, analysts said.

Chicago Mercantile Exchange hog deferred trading months <0#LH:> could open down as much as their maximum 3-cents per lb daily price limit on Monday, based on Friday's report, analysts said.

Investors actively sold futures prior to the report, which could mitigate some of the data's bearish bias, they said.   Continued...