U.S. lean hog futures rose Thursday after a report of record pork prices on Wednesday, and despite growing concerns about a U.S. debt crisis.
August hog futures rose 0.55 cent, or 0.5%, to $1.0247 a pound in trading at the Chicago Mercantile Exchange. CME October hog futures rose 1.02 cents, or 1.1%, to 92.45 cents a pound.
Hog futures shrugged off both a fall in corn prices and market jitters over stalled debt talks in Washington after pork prices hit an all-time high on Wednesday.
The U.S. Department of Agriculture's carcass composite value, a measure of wholesale prices, has hit record highs in each of the last three days, starting Tuesday. Prices on Thursday rose 18.4 cents a pound, to $1.0418, the USDA said in a report released after the market closed.
Pork prices have climbed steadily higher in recent weeks, even as the U.S. meat industry enters a seasonal summer lull, when consumers generally grill less meat. The rise in pork prices has been even more notable given a massive heat wave that spread hot, humid temperatures over many regions for a week or longer. To many brokers, swelling pork prices are a sign of very firm demand from export markets, especially since China has suggested in recent weeks it might import more pork to stabilize out-of-control food prices there.
"Clearly there is something underwriting the front end of this hogs market," said Steve Wagner at brokerage Country Hedging. "That's why the rumor about China hasn't faded in two weeks."
Corn futures for September fell 1.3% to $6.82 1/4 a bushel at the Chicago Board of Trade. Hog futures generally feel pressure from falling corn prices, since producers have fewer costs to pass along to meat packers.
Brokers also said investors are increasingly unwilling to make big adjustments to holdings until Washington lawmakers settle the ongoing debate about the U.S. debt ceiling. The Dow Jones Industrial Average closed down 62 points to 12240 Thursday after it fell nearly 200 points Wednesday.
Cash hog prices were reported steady to higher. Several plants were looking for additional supplies for next week. Demand for hogs was said to be strong, even with four facilities scheduled to be closed Monday.
Lighter average weights per animal are due in large part to the recent heat wave that caused some producers to delay taking some hogs to market to give the animals more time to grow and reach fuller size.
The terminal markets traded steady to $1 higher with top prices from $66 to $74 a hundred pounds on a live basis.