CHICAGO (Dow Jones)--U.S. lean hog futures were mixed Tuesday, with nearby contracts climbing on recent strength in cash prices.
CME lean hogs for October were recently up 0.825 cents, or 1%, to 87.5 cents per pound. Some 2012 contracts were lower.
"The cash market continues to stabilize here," Don Roose, president of U.S. Commodities in Des Moines, said. "That is a supportive factor."
Traders note that outside markets, including equities, are not weighing on the market Tuesday, as they have recently.
The market had fallen sharply in August while cash prices, which Roose said had become "too inflated," tumbled. But prices have since bounced, rebounding 5% in the past week.
Randy Fisher, head of Fisher Commodities in Kansas, added that futures are at enough of a discount to cash to limit any sell-off in futures.
Packer margins are positive, analysts said.
Views on exports, which have fueled record pork prices this year, are mixed. While sales have been robust throughout the year, some analysts said that demand is weakening somewhat. The U.S. Department of Agriculture on Monday somewhat lowered its 2011 forecast for pork exports after second-quarter shipments were lower than expected.
Cash hog prices are expected to be mostly steady, with supplies of slaughter-ready animals and current demand generally well balanced.
Wide processing margins are encouraging pork processors to expand their weekly slaughters in line with seasonal growth in supplies.
Strong export sales, on track to set a new record for the year, are also helping support hog and wholesale pork prices even though the markets have fallen during the past month from respective record highs hit in August.
The latest Dow Jones Newswires pork packer margin index was plus $14.32 per head, compared with plus $16.92 the previous day.
The USDA's pork carcass composite value Monday rose five cents to $94.28 a hundred pounds.
The terminal markets are expected to trade mostly steady with tops seen from $52 to $61 a hundred pounds.
The latest CME two-day lean hog index, calculated using USDA market data, for Friday was down 0.65 cent to 86.43 cents a pound.