U.S. lean hog futures were flat on short covering following the recent steep slide.
May lean hogs at the Chicago Mercantile Exchange were recently off 0.07 cent at 98.55 cents a pound following a 5 1/2-week low hit Tuesday. June hog futures, the most active contract, were unchanged at 97.10 cents following a six-week low hit Tuesday.
June had fallen nearly 5% in just the past four sessions due to a combination of declining cash prices, sluggish domestic demand for pork and selling by large investors, analysts said. The removal of much of the premium in futures to cash prices and expectations for seasonal strength in hog and wholesale pork prices led to light speculative buying and short covering.
Underlying support for lean hogs came from gains in live cattle futures.
There are still concerns about whether consumers will be willing or able to pay higher prices for meats with gasoline prices around $4 a gallon, which may temper the rally in futures, said Rich Nelson, director of research with Allendale Inc. In addition, chicken remains a cheaper protein option.
It's uncertain if the market will rebound enough to recover much of the recent losses or just stabilize near the current level, analysts and brokers said. Futures may take direction from wholesale pork prices and the cash hog markets during the next few days.
Domestic pork demand is expected to improve in May when backyard grilling becomes more active along with increased meat promotions for the Memorial Day holiday.
In the cash markets, bids were expected to range from flat to $1 per hundredweight lower on limited buying interest for the balance of this week. Monday's reduced slaughter schedules with some plants down in observance of the Easter holiday resulted in slower demand and lower prices. Buying for next week's full work schedule may help stabilize the cash market, said livestock dealers and market managers.
The terminal markets were expected to trade flat to $1 lower with top prices seen from $63 to $64 on a live basis.