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Hog futures notch seventh record high
U.S. hog futures ended the session Tuesday at
new all-time highs despite choppy trading throughout the day, as market
participants refocused on supply concerns due to a widespread swine
April hogs recovered earlier losses from the day, advancing 1.1
cents, or 1.0%, to $1.1710 a pound, the highest ever price for any
front-month contract and the seventh new record over the past eight
sessions. June hogs rose 1.45 cents to $1.2495 a pound, also a fresh
Porcine epidemic diarrhea virus, or PEDV, which first appeared in the
U.S. last spring, has spread to new barns through March, raising
concerns the disease could affect supplies longer than previously
expected. Market watchers are also watching for signs that the rapid
spread of the disease this fall is now resulting in fewer fully grown
hogs in some regions, because pigs take about six months to grow to
slaughter weight. So far this year, estimates of weekly pork production
remain on par with, or slightly higher than, year-ago levels.
The U.S. Department of Agriculture this week decreased the year's
forecasted pork production by 60 million pounds to 23.4 billion, citing a
drop in hog numbers, but the output is still 1% higher than 2013
After a nearly 17% surge in front-month futures over the past two
weeks --and a higher jump in deferred contracts-- some analysts are
concerned the buying could have taken prices too high, too soon, and
futures traded both higher and lower than the prior peaks throughout the
day Tuesday as a result.
"There's a big pullback in prices coming, but when and where is the
question," said Steve Wagner, an analyst with CHS Hedging in Inver Grove
Cattle futures ended mixed, lifted in the front-month contract by
climbing in wholesale beef prices and expectations for steady to
slightly higher cash trade this week. Strengthening margins for beef
processors have supported early estimates by some industry watchers for
cash cattle prices near the $1.48 to $1.50 a pound fetched by most
owners last week.
April cattle futures gained 0.07 cent, or 0.1%, at $1.4322 a pound.
Feeder-cattle for March rose 0.22 cent, or 0.1%, to $1.7392 a pound.
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(END) Dow Jones Newswires
March 11, 2014 15:06 ET (19:06 GMT)