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 virus.
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 high.
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 levels.
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 Heights, Minn.
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)