US hog futures rise as low pork prices may spur demand

Hog futures rose for the second straight day on speculation that US pork demand will increase after wholesale prices slumped to the lowest level this year.

Wholesale pork climbed 2.8% on Tuesday (Feb 2) after touching 67.59 cents a pound on February 1, the lowest price since December 31, according to USDA data. Retailers and importers may have stepped up purchases after a 14% drop from January 20 through February 1, said Doug Harper, an analyst at Richard A. Brock & Associates in Milwaukee.

Hog futures for April settlement rose 0.225 cent, or 0.3%, to 67.075 cents a pound on the Chicago Mercantile Exchange. The most-active contract gained 1.1% on Tuesday.

Wholesale prices had dropped on concern that Russia's effective ban on US poultry would leave more chicken to compete with pork. Russia, which bought more than 1.8 billion pounds (816,500 tonnes) of US chicken meat in 2008, barred imports of chlorine-treated poultry as of January 1.

Meanwhile, cattle futures for April delivery rose 0.225 cent, or 0.3%, to 90.1 cents a pound. Earlier, the price fell as much as 0.8%. The commodity has gained 4.6% this year. Feeder-cattle futures for March settlement advanced 0.175 cent to 97.4 cents a pound.

However, Harper said a winter storm in the southern Great Plains may curb cattle weight gains and hamper shipments.

Wholesale choice beef rose 0.2% at midday to US$1.4027 a pound, according to USDA figures. Beef slipped to the lowest price in almost four weeks. The meat is down 4.3% from a seven-month high reached on January 19.