000332 Friday's Commodities Roundup

Hog futures jumped 2% to their highest level in more than a year Friday as rising beef prices intensified speculation that more supermarkets and other retailers will showcase pork as a less expensive alternative.

In other markets, wheat rose and palladium fell.

Rising demand for bacon, currently in vogue with fast-food restaurants, has pushed pork futures higher for months. Frozen pork bellies, the source of bacon, have been the prime beneficiary.

But a continuing rally in lean hogs carried the near-term contract, for April delivery, up 1.30 cent to 62.05 cents a pound Friday on the Chicago Mercantile Exchange.

“The beef market by itself has put on about $9 (a pound) in the last two weeks. It gives you the idea that the retailer will now take a stronger look at maybe using pork in their ads,” said Dave Maher, an analyst for Securities Corp. of Iowa, based in Cedar Rapids.

The balmy recent weather in the Midwest also has contributed to hogs' ascent. Maher said hogs have fattened up and been slaughtered earlier than normal because they didn't burn off as much energy as usual to stay warm.

“We've created a minor hole in marketing,” he said. “There aren't as many available hogs as you'd expect at this time.”

Don Roose, president of U.S. Commodities Inc. in West Des Moines, Iowa, said the market caught up to the fact that hog prices were lower than they should be. He also attributed the buying rush in part to anticipation that the hog-and-pig report due out March 24 will be upbeat for the market.

Wheat prices tumbled on the Chicago Board of Trade, tripped up by a decline in soybeans and prospects of continuing precipitation in the dry U.S. winter wheat belt over the next week.

May wheat fell 31/4 cents to $2.60 a bushel. May soybeans fell 63/4 cents to $5.093/4 a bushel.

Palladium futures resumed their off-and-on rally on the Comex division of the New York Mercantile Exchange as Russia's long-promised deliveries of the metal continued to be missing in action. Trading was thin, with many investors on the sidelines due to uneasiness over the wild volatility that has sent prices this year to nearly double their previous all-time highs.

Russian officials have finalized quotas of palladium, which is in big demand to make catalytic converters in cars. But it's still not clear when the world's No. 1 supplier of the metal will begin shipping it out in large quantities again.

June palladium rose $13 to $700 an ounce, still well short of its recent all-time high of $835.

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