U.S. hog futures were higher Thursday on a flat to higher outlook for cash prices and five consecutive days of strength in wholesale pork prices as the market extended its recovery from a steep break early Wednesday.
April lean hog futures at the Chicago Mercantile Exchange recently traded 0.72 cent, or 0.8% higher at 91.70 cents a pound. June, the second most-active month, was up 0.80 cent, or 0.8%, at $1.0250 a pound.
The rebound in lean hogs was also aided by short covering, or buying back of positions sold previously, along with some renewed investor buying, analysts and brokers said.
Investor funds this week have pulled a lot of money out of agricultural commodities and put it in energy and financial markets amid concerns that political unrest in Libya and elsewhere in the Mid-East could interrupt the flow of oil. That contributed to the surge in crude oil prices to 2 1/2-year highs.
The agricultural commodities, including lean hogs, "are in a battle between a somewhat poor technical picture and fundamentals (cash livestock and meat prices) that are still positive," said Ken Jolliffe, analyst with BIS Commodities in Cedar Rapids, IA. "The market could remain awfully jerky" in the near-term, he said, as investor money flows in and out of the agricultural commodities. Some private investors may remain on the sidelines and not participate until the market becomes less volatile, he said.
In the cash markets, bids from processors are expected to be flat to higher for additional animals to be delivered next week. Some plants may be a bit snug on supplies for early next week, or demand for the pork could improve into March, analysts and livestock dealers said. Seasonally, hog supplies tighten during late winter into the spring and further into early summer.