090122 Hog Prices Rise on Signs of Increasing Pork Demand

January 12, 2009

(Bloomberg) -- Hog futures rose for the first time in three days as cash-market and wholesale-pork prices jumped, signaling that meat demand is climbing. Cattle also gained.

Average cash-market hog prices are up 13 percent in six sessions, U.S. Department of Agriculture data show. Wholesale pork rose 4 percent yesterday to the highest in almost a month.

"The demand side for hogs is improving, and that should be an underlying bullish force," said Dick Quiter, an account executive at FuturesOne in Chicago. "Russia has increased their import quota for hogs by double of what it was."

Hog futures for February settlement rose 0.25 cent, or 0.4 percent, to 62.675 cents a pound at 9:58 a.m. on the Chicago Mercantile Exchange. The most-active contract had extended last year's 5.2 percent gain by 2.6 percent this year, as of yesterday.

Russia raised its 2009 import quota for U.S. pork to 100,000 metric tons from 50,300 tons in 2008, the U.S. Meat Export Federation said this week.

Yesterday, wholesale pork jumped 2.29 cents to 59.32 cents a pound, the highest since Dec. 12, according to USDA data. The national average cash-market hog price advanced 2.7 percent, the most since Aug. 7, to 55.23 cents a pound.

Cattle futures for February delivery rose 0.525 cent, or 0.6 percent, to 83.725 cents a pound. The price tumbled 6.1 percent in the previous two days on signs of slack demand for beef.

Feeder-cattle futures for March delivery increased 0.6 cent, or 0.7 percent, to 92.85 cents a pound.

Wholesale beef rose 0.26 cent yesterday to $1.4375 a pound, the first gain in three days, USDA data show.