Nearby U.S. hog futures contracts rose Thursday to two-week highs and also set contract highs in several deferred months following an unexpected jump in cash hog prices in the Iowa-Minnesota market, reports Reuters. Early on Thursday, USDA reported hogs, on average, traded $3.80 per hundredweight higher in the Iowa/Minnesota cash markets.

"That is why we are up," said Dennis Smith, broker with Archer Financial Services. "I think there is good enough demand with these margins to keep hogs moving at higher prices." The average Iowa/Minnesota carcass hog price of $84.15 per hundredweight on Thursday morning compares with $50.96 a year ago.

High pork prices through the summer have pork plants operating in the black allowing them to pay higher prices for hogs. Pork plants, on average, should earn an estimated $16.10 per head on hogs on Thursday, according to the analysis firmHedgersEdge.com

Part of the support in hogs and pork is due to record high pork belly prices. USDA on Thursday reported cash pork bellies traded at a record $154 per hundredweight, up from the previous record of$151 set on Wednesday.

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Source: Reuters