Hogs prices rise due to increased demand for hams while cattle prices drop
Hog prices rose for a second day on speculation US grocers are stepping up ham purchases to prepare for increased demand during Christmas and New Year holidays.
Cattle futures fell however, erasing earlier gains.
The price of wholesale pork rose the most in a week yesterday after falling to a 7-month low on November 17, USDA data show. Lower-cost meat supplies may have spurred buying from retailers who are anticipating a boost in consumer demand, said Tom Cawthorne, the director of hog trading at R.J. O'Brien in Chicago.
Hog futures for February settlement rose 0.325 cent, or 0.5 percent, to 62.525 cents a pound at 10:40 a.m. on the Chicago Mercantile Exchange. A close at that price would be the biggest gain for a most-active contract since November 7. Before today, futures gained 7.5 percent this year.
Wholesale pork rose 0.99 cent, or 1.8 percent, to 56.7 cents a pound yesterday, according to the USDA. The price is down 8.8 percent this month. Wholesale ham gained 0.92 cent, or 2.2 percent, to 43.54 cents a pound yesterday, the USDA said.
In the cattle market, cattle fell to a 16-month low on concern the slumping global economy will curb demand for US beef. The Standard & Poor's 500 Index fell as much as 2.6 percent today as the US. Labour Department reported the biggest decrease in consumer prices on record.
Cattle futures for February delivery fell 1.075 cent, or 1.2 percent, to 86.525 cents a pound in Chicago. The price earlier touched 86 cents, the lowest since June 29, 2007. Before today (November 20, 2008) futures dropped 5.5 percent this month.
Feeder-cattle futures for January delivery dropped 1.175 cent, or 1.3 percent, to 90.075 cents a pound in Chicago. Earlier, the price touched 89.9 cents, the lowest for a most active contract since April 16, 2004. Futures had slipped 6.9 percent this month before today.
Wholesale choice beef rose 0.1 cent, or 0.1 percent, to US$1.5749 a pound yesterday, the highest price since September 25, the USDA said. The price has gained in 13 of the past 14 sessions and is up 11 percent this month.