Lean hog futures are trading higher on expectations for more export potential as the yen rises to 60-year highs.
The April contract recently was up 1.70 cents a pound, or 1.88%, at 86.90 cents at the Chicago Mercantile Exchange, while May added 1.20 cents, or 1.27%, to 95.70 cents.
The yen continues to strengthen amid speculation about Japan's likely repatriation of money to pay for rebuilding efforts. And while ships are having trouble unloading, traders see port-repair efforts being accelerated since Japan lives on foreign trade.
Hog futures began to bounce Wednesday as traders saw pork being one of the first products Japanese food importers will concentrate on. The protein is well-liked there, and it is cheaper than beef. Reports of buyers scouting around for some packaged products were enough to send buyers back into lean hog futures to speculate that pork demand would accelerate.
That demand picture grew overnight as U.S. and European equity markets rose. U.S. stocks are up in early morning action, and there is growing sentiment that there could be some form of G7 coordinated currency intervention, said Mike Zuzolo, analyst/broker at Global Commodity Analytics.
Traders appear to be taking on more risk in overnight trading as U.S. bonds and the U.S. dollar is weakening, and the idea appears to be gaining strength as hog prices move higher. The weaker U.S. dollar and the stronger yen are taking on greater importance to commodity investors, Zuzolo said.
Slaughter rates for the week through Wednesday were estimated at 1.248 million head, compared with 1.259 million a week earlier and 1.271 million a year earlier, the U.S. Department of Agriculture said.
Saturday's slaughter rate was expected to range from 70,000 to 75,000 head. At the current rate of slaughter, the week's kill likely will be only slightly below last week.
Terminal hog markets were expected to be mostly flat with highs expected from $55 to $56 on a live basis.