U.S. lean hogs futures rally Thursday, ending mostly higher on outside market support, optimism about exports and technical momentum.
CME lean hogs for October ended up 1.6 cents to 90.375 cents per pound.
The market shook off what was seen as a bearish Wednesday USDA report, gaining on early support from equities, even if equities couldn't hold their own rally. This helped push the market above technical resistance, including key moving averages, which accelerated the climb, analysts say.
Dec lean hogs catapulted past its 50-day, 100-day and 200-day moving averages, ending up 2.5 cents, or 3%, to 85.975 cents per pound.
Meanwhile, traders said expecations that China is going to import more pork boosted the market.
The sharp rise in pork complex surprised many long-time traders after the U.S. Department of Agriculture said the U.S. swine herd was 1% larger than a year ago on Sept. 1, which was bigger than the 0.5% rise analysts were on average expecting. The data point to rising supplies in winter and spring.
Cash hog prices were reported generally steady Thursday with a few plants quoting weaker prices early in the day. Inventory levels for next week vary somewhat, and plants with sufficient supplies through midweek or beyond were in a position to test the market with weaker bids.
Price on Friday are expected to be mostly steady on buying interest for next week and speculation that more plants will plan to operate on Oct. 8 than this Saturday. Projections for this Saturday's slaughter are mostly from 120,000 to 125,000 head, and the week's total is expected to be about 2.240 million to 2.250 million head. If the estimates are accurate, that would put the week's total up about 4.4% from a year ago.
The latest Dow Jones Newswires pork packer margin index was plus $14.52 per head, compared with plus $12.94 the previous day.
The terminal markets traded mostly steady on a live basis with tops ranging from $60 to $64.
The USDA's pork carcass composite value, a measure of wholesale prices, on Wednesday rose 37 cents to $97.78 a hundred pounds.