Hog Futures Climb on Higher Meat Prices
17 July 2017 - 8:18PM
Dow Jones News
By Benjamin Parkin
Hog futures started the week higher on an unexpected bump in
pork prices.
Wholesale pork prices rose to $1.0528 a pound at midday Monday,
with pork bellies climbing to a new record of $2.1343 a pound. A
number of analysts had expected prices to peak as wholesalers
prepare for lower demand in the fall, but a run-up in the cost of
bellies has continued to stave off a downturn.
That gave the futures market a boost, with August-dated lean hog
contracts at the Chicago Mercantile Exchange rising 1.1% to 80.775
cents a pound. Futures continue at a discount to cash prices, which
were expected to fall further on Monday, giving traders room to
buy.
Increasing hog supplies will pressure the market, said Rich
Nelson, chief strategist at brokerage Allendale Inc. In its most
recent inventory report, the U.S. Department of Agriculture showed
the national herd rising to a seasonal record of 71.7 million head
in early June, with a 2% increase in the breeding herd.
Cattle futures were mixed, with the front-month contract lower
while later months rose. CME August live cattle futures fell 0.7%
to $1.1695 a pound.
That market was also supported by higher meat prices, with a
pound of wholesale beef rising to $2.0992 a pound. Beef prices have
recently fallen sharply after a July 4 grilling boost.
Traders are waiting to see what direction the cash market will
take as the week progresses, after last week's unexpectedly higher
cash prices helped futures rally.
Write to Benjamin Parkin at benjamin.parkin@wsj.com
(END) Dow Jones Newswires
July 17, 2017 15:03 ET (19:03 GMT)
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