Hog futures rose the most in five months on signs that U.S. slaughtering plants are buying more animals as pork demand improves. Cattle also advanced.
Meatpackers processed 841,000 hogs in the first two days this week, up 7.3 percent from the same period last week and 0.2 percent more than a year earlier, according to the U.S. Department of Agriculture. Wholesale-pork prices rallied 0.4 percent yesterday to $1.0431 a pound and are up 3.1 percent this month, after dropping 8 percent in July, government data show.
"Packers seem to be willing to pay up for hogs and keep prices firm, so that is a bullish sign," Dick Quiter, an account executive at McFarland Commodities LLC in Chicago, said in a telephone interview. "Pork prices have stayed high. We’re also seeing some increased demand for Labor Day."
Hog futures for October settlement climbed 1.9 percent to close at 88.15 cents a pound at 1 p.m. on the Chicago Mercantile Exchange, the biggest gain for a most-active contract since March 7. Earlier, the price reached 88.325 cents, the highest since July 9.
Labor Day, on Sept. 2, tends to be the last holiday of the year that is warm enough to barbecue outdoors, and is the third- most popular day for grilling in the U.S., according to the Hearth, Patio and Barbecue Association.
Cattle futures for October delivery added 0.1 percent to settle at $1.28175 a pound in Chicago, after reaching $1.287, the highest for a most-active contract since March 13.
Feeder-cattle futures for September settlement fell 0.2 percent to $1.5745 a pound.