Chicago - Pork prices soared as speculators and commercial firms bought heavily after the U.S.
government said a deal could go ahead to ship 50,000 metric tons of pork to Russia as food aid in coming weeks.
In other commodity markets, silver jumped as traders bought on talk of a supply squeeze, and gold also rose despite talk of gold sales by the International Monetary Fund this year. Oil prices ended weak.
At the Chicago Mercantile Exchange, futures contracts for pork bellies for delivery in February, March and May rose the three-cent-per-pound daily trading limit, and prices for hog futures also rose sharply.
March pork bellies closed at 60.175 cents a pound, up 3.00 cents, and April lean hogs at 45.925 cents, up the daily trading limit of 2.00 cents a pound.
“If the government is telling the truth and they want to ship 110 million pounds of pork to Russia in the next seven weeks, then obviously that would take a slug of product off the market,” said Chuck Levitt, senior livestock analyst for Alaron Trading Corp in Chicago.
Cash hog prices, which plummeted to 50-year lows below 10 cents a pound in the U.S. Midwest in December, have staged a recovery in recent weeks amid government emergency measures to shrink the hog herd and buy pork for domestic and foreign food aid programs. On Thursday, hogs traded in Iowa, the top producing state, at around 26 cents a pound -- still well below the cost of production.
Chicago futures have reflected the gains, with traders citing possible additional food aid to Russia as well as rising fast-food usage of pork amid low wholesale prices.
Meat Industry Insights News Service
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