Hogs Rise as Packers Weather Storm
Hog futures rose as a winter storm disrupted the pork trade.
Transportation issues stemming from snowfall, high winds and low temperatures in the eastern U.S. disrupted the flow of slaughter-ready hogs into packing plants for processing.
The restricted availability of pigs contributed to higher physical hog prices. Cash prices rose $1.53 to $60.42 per 100 pounds on Wednesday and were expected to be steady to higher again on Thursday.
That prodded the futures market, with February-dated lean hog contracts rising 0.5% to 71.375 cents a pound at the Chicago Mercantile Exchange. Hog futures have recently traded at multimonth highs, in part over concerns about freezing temperatures in much of the U.S.
The weather was also dampening demand, said Dennis Smith of Archer Financial Services, disrupting meat consumption in affected cities as schools closed and people stayed home. Wholesale pork prices fell at midday Thursday after rising on Wednesday.
Cattle futures turned lower after initially rising. Some observers said that meatpackers had bought some cattle in northern states for around $125 per 100 pounds, up from last week and above the front-month February contract. Analysts had expected cash prices to rise this week.
But others said buying interest in the cattle market was waning after rallying through much of the holiday period.
"We had a typical weather rally," said Don Roose, president of U.S. Commodities. "That pushed us to the upside... The weather rally is fizzling because it looks like the weather is going to moderate again."
CME February live cattle futures fell 0.6% to $1.2225 a pound.
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(END) Dow Jones Newswires
January 04, 2018 15:34 ET (20:34 GMT)