Lean hog futures rose Friday on the Chicago Mercantile Exchange on hopes that cash prices for lean hogs may have bottomed out after a recent decline.
In other markets, crude oil fell, soybean and wheat futures were mixed, while cocoa futures fell.
Analysts say the lean-hog rally is a sign that supply and demand may be evening out in what had been seen as a oversupply of hogs. There is also talk that the federal government may step in with aid for hog farmers.
“There's a light at the end of the tunnel, and for once I can say it's not a train coming at me,” said analyst Bill Plummer, president of the Chicago-based Frontier Risk Management.
While he says the situation will likely be better for traders, Plummer said it should improve slightly for farmers -- at least to the break even point after what he called a “disastrous” year. He predicts that, by mid-winter, prices for live hogs will improve to 25 to 30 cents a pound.
Plummer said the livestock scene should be improving overall, especially on news that, this week, Americans consumed a record 930 million pounds of meat.
“The whole meat picture is looking better,” Plummer said. “This is probably the peak of meat production. I believe there's reason for optimism in 1999.”
In trading Friday, February live cattle broke even at 58.97 cents a pound; January feeder cattle dropped .05 cent to 67.72 cents a pound; February lean hogs rose 1.22 cents to 29.37 cents a pound; February pork bellies rose .35 cent to 42.62 cents a pound.
Meat Industry Insights News Service
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