August 16, 2011

 

US hog futures go beyond month-long rally

 

 

US hog futures further increased, capping the longest rally in more than a month, amid signs of consumers buying more pork in preparation for the Labour Day holiday on September 5.

 

Wholesale pork gained 0.9% last week, climbing to a record US$1.1019 a pound on August 8, USDA data show. On August 11, the government lowered its estimate of pork production for next year.

 

"We usually see buying three weeks ahead of time for these holidays," Rich Nelson, the director of research at Allendale Inc. in McHenry, Illinois, said. "We are seeing supplies tighten more than people were expecting."

 

Hog futures for October settlement gained 0.5 cent, or 0.6%, to close at US$0.89975 a pound at 1:12 p.m. on the Chicago Mercantile Exchange, rising for the third straight session, the longest rally since July 7. The most-active contract has advanced 21% in the past year.

 

Labour Day is the second-most popular day for barbecues, with 75% of US grillers cooking out, a National Cattlemen's Beef Association study found. Independence Day ranks No. 1.

 

Cattle futures for October delivery fell US$0.0135, or 0.3%, to settle at US$1.201 a pound on the CME. The commodity has jumped 26% in the past 12 months.

 

Wholesale beef climbed to US$1.8113 a pound, the highest since July 14. Cash prices gained because animals weigh less on average in the summer heat, Don Roose, the president of US Commodities Inc. in West Des Moines, Iowa, said by telephone.

 

Recently, "temperatures have moderated quite a bit in the Corn Belt, and that's going to add a bit of tonnage," he said.

 

Feeder-cattle futures for October settlement gained US$0.01375, or 0.3%, to close at US$1.39075 a pound in Chicago.

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