Chicago - Pork futures prices rose sharply in quiet trading on the Chicago Mercantile Exchange as traders sat out the market in expectation of an upcoming hog and pig report which is expected to show abundant supplies.
In other markets, grain and soybean futures prices were mostly lower and crude oil futures prices were higher.
The thin trading and low volume in the hog pits were due to wariness before Tuesday's U.S. Agriculture Department's quarterly hogs and pig report, according to analysts. The report will show the size of the hog population and how many hogs producers are breeding as of Dec. 1.
Because there were few players in the market Monday, those willing to buy ahead of the USDA report had to pay whatever was being asked, thus sending the market higher, said analyst Charles Levitt of Alaron Trading Corp.
Whatever the figures in the hog and pig report, the expectation is it will be bullish for the market because producers losing money in the cash market no doubt will be breeding fewer hogs, Levitt said. But the report also is expected to show the hog population will be up 2 percent from last year.
Pork producers have been battered by an economic downturn in Asia that has resulted in a sharp fall in purchases. It came on the heels of rapid expansion of herds on expectation of increased demand. The abundant supplies have resulted in downward pressure on cash prices.
“The industry is trying to pare down the size of the hog population,” Levitt said. “But it can't be done overnight.”
December cattle were .65 cent higher at 60.90 cents a pound; January feeder cattle were .80 cent higher at 69.67 cents a pound; February hogs were 1.33 cents higher at 32.40 cents a pound; February pork bellies were 3 cents higher at 45.10 cents a pound.
Meat Industry Insights News Service
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