Lean hog futures closed higher and most contracts hit new highs on stronger cash prices and recent gains in wholesale pork prices to nearly seven-month highs.
In other markets, live cattle and feeder cattle futures were higher as well.
April, the front month hog contract at the Chicago Mercantile Exchange, hit a five-week high and closed up 1.0 cent, or 1.1%, at 93.60 cents per pound, the highest settlement price for that contract since Feb. 10. Most-actively traded June was up 0.22 cent, or 0.2%, at $1.0347 a pound after posting a new contract high at $1.0415.
Traders discounted the quarterly hogs and pigs data released Friday, which was initially viewed as modestly bearish and weighed on the summer contracts Monday. Traders are looking beyond the report because slaughter rates this month have been running more than 1% below the levels projected in Friday's report, and they question the 1% more hogs predicted to be available early this summer, a broker said.
U.S. pork sales internationally are expected to be record high this year and possibly beat the nearly 11% increase projected by the U.S. Department of Agriculture. Pork exports in January were up 16% by volume from a year ago and 22% higher in sales value.
Hog prices are also getting a boost from strength in cattle and beef prices, analysts said. Pork is the mid-priced meat between beef and the cheaper chicken category.
The cash markets were reported flat to higher with buying interest seen as generally active from some processors for additional loads to arrive late this week and weekend. Expectations for the weekend slaughter are mostly from 65,000 to nearly 70,000 head, up slightly from a week ago. The weekly total is also projected to be up modestly from a week ago but still down about 1.5% from a year ago.