U.S. lean hog futures rose Wednesday ahead of an afternoon government report that will detail the size of the U.S. hog herd.
October hog futures rose 0.12 cent, or 0.2%, to 88.75 cents a pound in trading at the Chicago Mercantile Exchange. CME December hogs rose 0.35 cent, or 0.4%, to 83.82 cents a pound.
Traders covered short positions and generally squared books ahead of the U.S. Department of Agriculture's latest Hogs And Pigs Report, due Friday at 3 p.m. EDT (1900 GMT). Analysts expect the report to show the U.S. hog herd on Sept. 1 was slightly higher than the same time a year ago. A prolonged summer heat wave is also expected to have weighed on reproduction rates, according to a survey of analysts.
The report's details could either prolong or bring to an end a recent wave of momentum tied to meat-demand fundamentals that's pushed the pork complex higher in recent sessions.
A USDA cattle-on-feed report from Friday showed tighter-than-expected supplies of cattle, which will likely lead to higher prices and, potentially, spill-over demand for pork from price-shocked beef eaters.
Lean hog prices have been stable in recent weeks, in keeping with historical patterns that generally show a temporary rally for prices in September before a seasonal expansion of supplies weighs on prices in October and November. Hog producers typically turn up production starting in late summer as cooler weather makes for more cost-efficient hog-raising conditions.
Early predictions for cash-hog prices are for them to be mostly steady today, with quotes of 50 cents to $1 a hundredweight lower in some places, as most meat packers now have supplies for the week.
Demand could soften Thursday as brokers say most packers will be flush with supplies of animals after today. Early projections for Saturday's slaughter are from 115,000 to 125,000 head and the terminal markets are called little changed to slightly lower in some places.
The latest Dow Jones Newswires pork packer margin index was plus $12.94 per head, compared with plus $11.92 the previous day.
The USDA's pork carcass composite value Tuesday was down 40 cents to $97.41 a hundred pounds.
The latest CME two-day lean hog index, calculated using USDA market data, for Monday was up 0.28 cent to 91.20 cents a pound.