By Benjamin Parkin
Hog futures rose on Tuesday, lifted by higher pork prices.
Wholesale prices for bellies, used to make bacon, tumbled last week. That dragged broader pork prices lower, which in turn weighed on futures.
But a bounce in pork belly prices early this week has helped steady the hog market. Wholesale values rose over $7 to $108.14 per 100 pounds on Monday, adding another dollar on Tuesday morning.
That helped spark buying interest among futures traders, who bet that the hog market had recently fallen too far. Hog futures have lost around 10% of their value since February.
Analysts said demand for some cuts, such as hams, was due for a seasonal boost ahead of Easter. That could bolster prices.
April-dated lean hog contracts at the Chicago Mercantile Exchange rose 0.1% to 67.725 cents a pound, backing away from larger gains earlier in the session.
Ongoing weakness in physical hog values limited gains. Cash prices fell on Monday and observers expected meatpackers to bid steady money to a dollar less on Tuesday. Prices were $1 lower as of the morning.
Cattle futures were mixed, with the front-month April contract rising while others slid. CME April live cattle futures rose 0.3% to $1.219 a pound.
Some cash cattle trade was underway on Tuesday, earlier than usual. Meatpackers bought some cattle in southern states for $126 and $127 per 100 pounds on a live basis.
Those prices were steady to higher than last week. Given widespread anticipation that growing supplies would start to weigh down the market, that helped boost futures during the trading session.
Cattle traders were also closely watching wholesale beef prices, which have recently rallied on strong demand. Prices on Friday and early this week have hovered around $224 per 100 pounds, which some analysts say may mark a seasonal peak.
Write to Benjamin Parkin at firstname.lastname@example.org
(END) Dow Jones Newswires
March 13, 2018 15:00 ET (19:00 GMT)
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