U. S. hog futures rose for a second straight day to its highest level in 18 months Feb. 26 as tight supplies continued to stoke cash markets, and late in the session fund buying.
Most-active April contract rose 6.1 per cent during the month. June equalled a contract high, while both July and August set contract highs.
Rising cash markets and prices for pork products hitting one-month highs this week was largely behind the rally.
“Prices have found good support from firm cash livestock and wholesale meat prices,” said Doug Houghton, commodity analyst with Brock Associates Inc. “Expectations for seasonal strength in meat demand as the spring grilling season nears are also providing support.”
The U. S. Department of Agriculture on Feb. 25 put the average wholesale pork price up 77 cents at $72.19 per cwt, close to the Feb. 24 level that was the highest level since Jan. 26.
Cash hog markets moved higher most of the week as strong packer margins prompted good interest for a reduced supplies of market-ready hogs.
“Cash sources continue to report that market-ready hog supplies are being limited by slow weight gains resulting from poor-quality corn and winter weather stress,” Houghton said.
Some traders also cited talk that the U. S. hog count may have been too high in past USDA Hogs and Pigs reports. Hog numbers are running less than projected in the latest quarterly report released in December.
Expectations that there may also be a resolution in the U. S.-Russia poultry dispute added to underlying support.