U.S. lean hogs futures rose Wednesday as corn climbed with other commodities and the U.S. dollar fell.
The July hogs contract settled up 0.85 cent, or 0.9%, to 95.22 cents a pound in trading at the Chicago Mercantile Exchange. The August contract rose 0.82 cent, or 0.9%, to 93.17 cents a pound. October contract ended 0.9 cent, or 1%, higher at 87.70 cents a pound.
Helping to push hog prices higher was corn futures, with the September contract closing up 1.2% to $6.78 a bushel at the Chicago Board of Trade. A rise in corn prices is particularly supportive of hog futures because producers demand higher prices for animals as feed costs rise. They also may cut production to limit exposure to rising corn prices.
Commodities generally received broad support after the Greek government voted to enact economic reforms, which pushed down the value of the dollar as investors gained confidence in the European economies. Dollar-denominated commodities typically rise in price when the greenback falls in value as foreign consumers gain buying power.
Hog futures moved higher even though cash prices appeared to soften now that packers have filled Independence Day orders from retailers, whose meat sales typically surge in the days before the holiday. Consumers typically buy more meat for July 4th grilling, but then pull back on consumption afterward as summer weather heats up.
Analysts said the rally was also fueled by a sizeable gap between current cash prices for hogs and the prices of futures in hogs. Cash and futures prices are linked because they tend to converge as the futures contract reaches expiration.
The U.S. Department of Agriculture's carcass composite value, a measure of wholesale prices, Wednesday fell 33 cents to $97.04 a hundred pounds.
Cash hog bids were reported steady to lower on slow buying interest ahead of the Independence Day holiday weekend. Many of the pork processing plants have sufficient supplies through the middle of next week or later, said livestock dealers and market managers. Fewer hogs being offered for sale and lighter carcass weights at this time of the year are expected to limit declines in cash prices.
The latest Dow Jones Newswires pork packer margin index was minus $8.88 per head, compared with plus 42 cents a head the previous day.
The terminal markets traded mostly steady with top prices from $66 to $68 a hundred pounds on a live basis.