U.S. lean hog futures closed higher Thursday on solid demand. CME lean hogs for October closed up 0.725 cents to 89.175 cents per pound.
The market gained on follow-through buying as the market digests soaring pork prices in China reported Wednesday, said Rich Nelson director of research for Allendale, an Illinois brokerage.
Nelson said that the gains are seasonal, as buyers typically stock up this week in preparation for National Pork Month in October. Another analyst added that sales are slowing because farmers are focusing more on harvest.
Cash hog prices have risen steadily since early last week as meat packers have continued to expand slaughter rates and fielded rising orders from retailers, who stock meat cases for the fall grilling season. Consumers typically eat more meat in late summer and early autumn as cooler temperatures make for better grilling weather.
Cash hog bids were reported Thursday steady to $1 a hundred pounds higher on buying interest to complete slaughter schedules late this week and to add to inventories for next week.
Projections for Saturday's slaughter are mostly from 155,000 to 160,000 head. The week's total is expected to be about 2.275 million head, up approximately 4.8% from a year ago.
Pork processors have profitable margins, which along with strong export demand are encouraging packers to slaughter more hogs as supplies undergo seasonal expansion.
The latest Dow Jones Newswires pork packer margin index was plus $11.34 per head, compared with plus $12.36 the previous day.
The terminal markets traded steady to $2 higher with top prices from $52 to $64 a hundred pounds on a live basis.
The USDA's pork carcass composite value, a measure of wholesale prices, on Wednesday was up 88 cents at $95.72 a hundred pounds.