Lean-hog futures rose Tuesday on the broad-market rally and as higher cash prices for hogs continued to support the complex.
October hog futures rose 1.37 cents, or 1.6%, to 89.02 cents a pound in trading at the Chicago Mercantile Exchange. CME December hog futures rose 1.15 cents, or 1.4%, to 82.97 cents a pound.
Cash hog bids were reported mixed with some strength seen in the western corn belt but flat to weaker quotes were seen in the eastern corn belt. Some plants in the west were buying additional hogs for delivery later in the week and weekend.
Traders are watching for expected signs that supplies are beginning to outstrip demand, a dynamic that usually takes place in late September or October as hog producers continue to turn out higher hogs on a seasonal basis.
Prices typically stabilize in September as meat packers gear up for the fall grilling season, and then fall again in October and November as supplies climb toward their seasonal peak. Pork production often rises almost 20% between August and October as hog producers turn up production as cooler weather makes for more efficient hog-raising conditions.
Early projections for Saturday's slaughter range from 140,000 to 145,000 head.
Pork processors continue to have profitable margins, due in large part to strong export sales. Packers are making money so they are pushing more hogs through the plants, and the good demand is helping to prop up prices.
The latest Dow Jones Newswires pork-packer margin index was plus $8.00 per head, compared with plus $8.60 the previous day.
The terminal markets traded steady to higher with top prices from $56 to $65 a hundred pounds on a live basis.
The USDA's pork carcass composite value, a measure of wholesale prices, on Tuesday fell five cents to $95.84 a hundred pounds.