November 9, 2010

 
CBOT hog and cattle prices increase on demand for US pork
 

Hog and cattle prices rose in CBOT on November 5 due to signs of increasing demand for US pork.

After reaching its lowest level on October 27 since March, wholesale pork prices gained 5.1% last week, the most since August 20, according to USDA. Meatpackers also processed 2.34 million hogs in the previous week, an increase of 1.2% from a week earlier. The price of hogs for immediate delivery reached the highest level since October 27.

There is "good demand for the hogs," said an analyst. "We picked up some export business from the lower prices, maybe, last week. We're seeing some domestic-ham and holiday-type business come to the market."

Hog futures for December settlement had an increment of 0.9%, reaching US$0.675 a pound. Before today, the commodity jumped 18% in the previous year.

On November 5, wholesale pork increased by 0.3% to US$0.775 a pound. This is the highest level since October 19 and the spot-market hog price gained 1% to US$0.597 a pound, USDA data showed.

"Packers are making money," analysts said. "There's every incentive to keep this going by processing as many hogs as possible," he said.

Meanwhile, cattle futures for December delivery increased by 0.3%, to US$0.979 a pound on the CME. Before November 9, the price advanced 13% in 2010.

In the first half of last week, steers for immediate delivery at slaughter houses averaged US$0.976 a pound, down by 2.3% from the previous week, USDA data showed. On November 5, the price of wholesale-choice beef fell by 0.3% to US$1.586 a pound, the lowest level since October 19.

Feeder-cattle futures for January settlement rose 0.1% to US$1.109 a pound.