Hog futures rose on Wednesday as strong demand for pork continued to fuel a rally in the market.
June lean hog futures touched a three-month high at the Chicago Mercantile Exchange before easing off those peaks to close 0.2% higher at 78.90 cents a pound. Some contracts for later-month delivery fell, however.
"Pork is cheap," said the Steiner Consulting Group in a note. "It is very competitive with other proteins domestically and very competitive in the global marketplace."
Demand for the meat has helped fuel higher prices in the cash market for hogs, with packers raising bids to secure supply from dealers. Cash hog sales averaged at 71.99 cents a pound on Tuesday and were expected to continue gaining. Wholesale pork, meanwhile, rose to 85.63 cents a pound on Wednesday.
But pork's gain might be beef's loss, Steiner said, with pork poised to become the retailer's featured meat of choice as beef gets more expensive. Beef prices slid on Wednesday morning, however, shedding 57 cents to $249.31 per 100 pounds.
CME June live cattle futures rose, ending six consecutive days of losses to close up 0.5% at $1.2245 a pound.
A busy cash market boosted intraday prices. Packers bought around 1,600 cattle for an average of $1.35 a pound for nine-day delivery at Wednesday morning's Fed Cattle Exchange online auction.
That was down from last week's average of $1.39 a pound, but analysts said the sales, mostly in southern states, could help set the tone for steadier cash prices later this week.
"We're at a time when the industry is expecting prices to go lower," said Trey Warnock, an analyst at Amarillo Brokerage in Texas.
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(END) Dow Jones Newswires
May 17, 2017 15:02 ET (19:02 GMT)