U.S. livestock futures ended mixed Friday, with front-month lean hogs climbing on an improving demand outlook while other contracts fell amid broad commodity pressure.
The relative strength in hogs reflected increased optimism that pork demand is improving, analysts said.
Lean hogs for June settled up 0.35 cent, or 0.4%, at 94.55 cents, while the July contract closed down 0.3 cent, or 0.3%, at 93.85 cents.
While early demand for the key summer season was disappointing due in part to poor weather, a seasonal increase is "starting to bloom," said Mike Zuzolo, president of Global Commodity Analytics and Consulting.
"We are starting to pick up some demand support," he said.
Packers' margins are starting to improve, and futures climbed on "ideas that the cutout should start to show a little bit of life," said Tom Cawthorne, vice president and hog futures trader for R.J. O'Brien.
Retail pork prices remain "extremely strong," and set a new all-time high according to USDA Meat Price Spread data released Friday, J.P. Morgan analyst Ken Goldman said in a note to clients.
He added that price spread earned by retailers remained "quite robust," which is supportive to hog prices.
"All else equal, the more money made at the retail level, the more likely the average grocer is to feature the item and/or be willing to pay up for it," he said.
In the cash hog markets, prices were mostly steady with a few firm bids reported for additional loads to arrive next week. Improved demand for pork grilling cuts and bookings for the Memorial Day holiday could support cash prices early next week, livestock dealers and analysts said.
The terminal markets traded steady to $1 higher with top prices from $62 to $62.50 per hundred pounds live basis. The latest Dow Jones Newswires pork packer margin index was plus $3.36 per head, compared with plus $0.38 the previous day.
USDA's pork carcass composite value, a measure of wholesale prices, for Thursday was $95.00 per hundred pounds, up $2.64.