U.S. lean hog futures were modestly higher in early trading Wednesday amid support from weakness in the dollar and spillover strength from gains in most other commodity sectors.
May lean hogs at the Chicago Mercantile Exchange were up 0.07 cent at $1.0310 a pound. June hog futures, the most active contract, was last up 0.42 cent, or 0.4%, at $1.0245 a pound.
These factors tend to attract more large investors into the riskier commodity markets, including livestock futures, analysts said.
A weaker dollar is considered supportive for commodity prices because it benefits international customers to purchase more pork and other goods from the U.S. at less cost to them. Gains in lean hogs were capped however by a flat-to-weaker outlook for near-term cash hog prices heading into the Easter holiday weekend.
Pork processors appear to have their hog supply needs for this week generally well covered, said Don Roose, analyst with U.S. Commodities. "If it were not for the outside factors providing support, the lean hog market would be lower," Roose said.
Several pork processing plants will take a day off, with two scheduled to be closed Friday and 10 off on Monday, according to livestock dealers and market managers. Friday's slaughter is expected to be trimmed by around 15,000 to 20,000 from normal and Monday's could be down around 130,000 head from normal.
Providing some support in the summer months are expectations of seasonal trend for cash and pork prices beginning after Easter and extending into May. Higher corn prices may cause producers to reconsider any plans they may have been considering about expanding their breeding herds and may also lead to selling the animals at lighter weights.
The U.S. Department of Agriculture reported average hog weights in Iowa/southern Minnesota for last week fell 0.9 pound from the previous week to 272.2 pounds, with the drop considered supportive for prices. The latest figure was still 2.9 pounds above the year-ago average.
The terminal markets were expected to trade generally flat with top prices seen from $63 to mostly $64 on a live basis.