Chicago Mercantile Exchange February lean hog futures rose nearly 3 percent on Tuesday and set a contract high, buoyed by firmer cash hog prices and spreading against cattle futures, traders said.
Wholesale pork fetched $80.71 per cwt, down 38 cents from Monday. But lean hogs in the top cash market of Iowa and southern Minnesota rose 48 cents Tuesday to $70.52 per cwt, according to U.S. Department of Agriculture data.
Traders expect that packers will continue to compete for hogs, especially in the eastern Corn Belt, where snow and cold temperatures are impacting the movement of hogs off farms.
February hogs settled up 2.325 cents per pound at 73.900 cents after posting a contract high at 74.25 cents. April ended 1.825 cents higher at 76.150 cents.
Live Cattle End Higher
CME live cattle futures firmed for a third straight session, with the February contract pushing above its 200-day moving average.
Wintry weather may have played a role, complicating the transportation of livestock to packing plants.
Views on this week's cash cattle trade were mixed, with bulls expecting packers to pay up for cattle based on good margins and a smaller number of animals for sale than last week.
But bears see steady to weaker cash prices due to soft beef demand and increased supplies ahead.
Cash bids early Tuesday in the U.S. Plains were $118 per cwt against asking prices of $122 to $123 in the southern Plains.
Cash cattle traded last week in the Plains at $118 to $121 per cwt.
February live cattle finished up 0.725 cent per pound at 118.100 cents. April ended up 0.925 cent at 120.375 cents.
CME feeder cattle futures rose, led by higher live cattle futures. Most-active March feeder cattle closed 1.275 cents per pound higher at 143.925 cents.