June 1, 2012

As US cattle prices rose, hog futures surged at its furthest in 16 months on signs of strong demand for domestic pork.

In the wholesale market, the price of pork headed for the biggest monthly gain since July, while loins yesterday rose the most in more than a week, USDA data show. That rally indicates high meat sales for the Memorial Day holiday weekend, which ended May 28, said Doug Houghton, an analyst at Brock Associates.

"The loin-price increase would seem to indicate good grilling demand," Houghton said in a telephone interview from Milwaukee.

Hog futures for July settlement rose by the exchange limit of 3 cents, or 3.4%, to settle at 91 cents a pound at 1 p.m. on the Chicago Mercantile Exchange, the highest for a most- active contract since April 13. The gain was the largest since January 26, 2011.

This month, the commodity increased 5.9%, matching the monthly gain in September. Today's rally was the biggest among the 24 raw materials in the Standard & Poor's GSCI Spot Index.

Cattle futures for August delivery advanced 0.8% to US$1.189 a pound in Chicago. In May, the commodity climbed 4.2%, the most since January.

Feeder-cattle futures for August settlement increased 0.5% to US$1.568 a pound.