U.S. lean hog futures rose Tuesday on a string of record prices for pork and tighter supplies tied to the recent heat wave.
August hog futures were recently up 0.65 cent, or 0.6%, to $1.0375 a pound in trading at the Chicago Mercantile Exchange. October hogs were recently up 0.7 cent, or 0.8%, to 93.7 cents a pound.
Prices across the pork industry, from futures to fresh meat, have in recent weeks found support from a pair of fundamentals.
China is grappling with out-of-control food prices and has promised to boost supplies of pork there, which means it must either increase the production of Chinese hog farmers, or import more foreign pork.
At the same time, an enduring summer heat wave across the South and Midwest has made it harder for hogs there to gain weight, which in turn forces producers to sell them at a smaller weight to make room for incoming hogs. The lighter animal weights at sale result in less pork produced from each hog and overall.
That pair of dynamics have pressed pork prices to sky-high levels, triggering five straight days of record pork prices.
The U. S. Department of Agriculture's carcass composite value, a measure of wholesale prices, on Monday climbed 73 cents to $105.37 a hundred pounds -- up 5.1% in the last week -- and a fifth consecutive record.
Prices have also broken with their seasonal pattern of falling during the dog days of summer, when many consumers grill less meat and favor lighter meals.
Even as China signals growing demand for pork, "the heat continues to take tonnage off the market," which means a fall in the average hog weight, said Don Roose, president of brokerage U.S. Commodities Inc.
The cash hog markets Tuesday are predicted to trade mostly steady to higher in some locations as hot temperatures continue to trim weight gains. Processors needing additional hogs for arrival later Tuesday or Wednesday may have to compete for the limited supplies.
Forecasts for temperatures to moderate in the upper Midwest overnight into Wednesday could cause producers to hold off selling until after the cooler air arrives. Many of the animals need more time to gain weight and reach the desired size, and cooler temperatures reduce stress on the hogs during transportation to the processing plants.
Analysts predict Tuesday's slaughter to be around 404,000.
The latest Dow Jones Newswires pork packer margin index was plus $1.86 per head, compared with plus $1.64 the previous day.
The terminal markets were expected to trade mostly steady to higher.
The latest CME two-day lean hog index, calculated using USDA market data, for Friday was up 0.75 cent to $1.0226 a pound.