Lean-hog futures closed slightly higher on seasonal declines in slaughter rates and expectations for an uptick in demand following a sharp falloff in prices in recent weeks.
The May futures contract for hogs settled up 0.37 cent, or 0.4%, at 95.65 cents a pound, while the June contract climbed 0.25 cent, or 0.3%, at 95.47 cents a pound.
Supporting prices is the seasonal decline in the hog slaughter rate, which should help to tighten supplies in the months ahead. Futures also are finding support from expectations new demand will materialize after a sharp drop in prices, said Rich Nelson, director of research with Allendale Inc.
In cash markets, apparent slow buying interest among processors for hogs to begin the week suggested many pork plants have enough animals through midweek or beyond. Seasonally tightened supplies may be causing processors to trim their slaughter schedules to be more in balance with the number of animals available.
Thin to negative processing margins are causing buyers to bid cautiously when negotiating with sellers.
Cash hog bids in the Midwest near midday were mostly flat, with a few locations down as much as $1 per a hundred pounds. Sales volume is extremely light so far, which made it difficult to tell an overall direction of the market, according to analysts and livestock dealers. Some plants are quoting flat to near flat prices for late-week deliveries, dealers say. Terminal markets also are little changed.