Hog Futures Touch Upper Limit

By Benjamin Parkin Features Dow Jones Newswires

Hog futures leaped as a slump in meat and cash prices halted.

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Lean hog futures for October delivery at the Chicago Mercantile Exchange rose 3.7% to 63.75 cents a pound, touching their upper daily limit of 64.45 cents earlier in the session. That was the highest close since August 24.

Futures rallied as cash-market hog and pork prices, which have fallen recently on the back of softer demand, turned higher.

Cash prices for slaughter-ready hogs rose on Friday and again on Tuesday morning, by 28 cents to $62.56 per 100 pounds, despite expectations that meatpackers would lower their bids. Wholesale pork prices, meanwhile, climbed 76 cents to $85.23 per 100 pounds on Tuesday morning, following through on gains from late last week.

That stability in pork prices helped futures, said Dennis Smith, a commodities broker at Archer Financial Services in Chicago, with ham, belly and loin prices all showing signs of steadying. Tumbling belly prices in particular weighed down the market in recent weeks.

The hog market found added strength after climbing past technical support levels, analysts said.

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Cattle futures, meanwhile, were mixed, closing lower despite a late-morning surge. CME October live cattle contracts fell 0.7% to $1.04425 a pound, while September feeder cattle dropped 0.5% to $1.4205 a pound.

Wholesale beef prices were also higher as of Tuesday morning, rising 91 cents to $192.26 per 100 pounds.

But analysts say momentum in cattle futures is unlikely to turn higher without an uptick in cash-market prices, which typically starts with the online Fed Cattle Exchange auction on Wednesday. Feedlots have listed 1,240 head of cattle at the auction. Prices last week averaged $1.05 a pound live and $1.66 a pound dressed.

Write to Benjamin Parkin at benjamin.parkin@wsj.com

(END) Dow Jones Newswires

September 05, 2017 15:23 ET (19:23 GMT)