Strong US pork market lifts futures to six-month high

US hog futures bounded to a six-month high earlier, following strong gains in cash pork prices, the apparent result of better sales in retail and export markets.

Talk of brisk pork sales has circulated for some time and the latest gains in cash pork prices appear to have investors believing it. On Thursday (Dec 3), they bid hog futures to their highest level since mid-June.

The US Agriculture Department (USDA) earlier reported the average wholesale pork price was up US$1.19 at US$62.32 per cwt, the highest since July.

Livestock Marketing Information Center economist Jim Robb says that export demand appears to be increasing and adds that the US economy is also slowly improving which may be helping meat sales.

Because of the government's two-month lag in reporting pork exports, analysts and economists often rely on monthly meat supply data to gauge exports.

The talk of active pork exports first emerged last month when a USDA report showed a surprising drop in pork supplies in October. Analysts attributed that drop to exports.

In morning trading, Chicago Mercantile Exchange December hog futures rose 0.825 cent to 60.500 cents per lb and the February futures rose 1.25 cents to 67.900 cents. The December price was the highest for that month since mid-June.

Live cattle futures, also traded at the Chicago Mercantile Exchange, have not benefited from pork's gains as those futures have been trending lower pressured by lower beef prices.

USDA early on Wednesday put the wholesale choice boxed beef price down US$1.43 at US$140.14 per cwt, the lowest in more than one week.