Pork futures prices advanced strongly Tuesday on the Chicago Mercantile Exchange, reflecting a belief that the slaughter level of hogs will start declining.
On other markets, most grain and soybean futures were higher, energy futures were mixed and precious metals were slightly lower.
The hog kill ordinarily tapers off at this time of year, and the market is trying to find a seasonal bottom for prices, said Philip Stanley, an analyst with Thomson McKinnon Securities.
The advancing prices touched off computer-generated buying in pork belly futures, with the February contract up 1.40 cents a pound before the gains were slightly trimmed.
While the industry is looking for a cutback in production, the slaughter level has been extremely high, as reflected in a huge movement of pork bellies into storage last week that was reported after the close of trading Tuesday.
Despite higher spot-market prices for cattle, the December cattle futures contract struggled all session and closed lower.
"There are expectations that supplies will be increasing in December and into February," Stanley said. "It could be that we're getting close to a top in the market."
Live cattle closed 0.48 cent lower to 0.30 cent higher, with the December contract at 66.37 cents a pound; feeder cattle were 0.20 cent lower to 0.25 cent higher, with January at 75.62 cents a pound; live hogs were 0.20 cent to 0.70 cent higher, with December at 44.97 cents a pound, and frozen pork bellies were 1.03 cents to 1.40 cents higher, with February at 56.87 cents a pound.
Most grain and soybean futures contracts advanced on the Chicago Board of Trade.
Wheat futures rose at the opening, reflecting active export trade, said Barney Janecki, a trader with Dean Witter Reynolds.
On Monday, the Agriculture Department offered 1.5 million tons of subsidized U.S. wheat to Morocco. That followed recent bids by China and the Soviet Union for large amounts of U.S. wheat.
Soybean prices opened slightly lower because of the dollar's strength against major foreign currencies, but commercial buying developed in the soy meal market, said Dale Gustafson, an analyst with Drexel Burnham Lambert.
"This brought the market back, with beans carried along on technical buying," he said.
Corn futures moved slightly higher following beans and wheat, Gustafson said.
Wheat futures were 1.5 cents to 5.75 cents higher, with December at $3.05 a bushel; corn was 0.25 cent to 1.75 cents higher, with December at $1.8725 a bushel; oats were 0.25 cent to 2.25 cents lower, with December at $2.065 a bushel, and soybeans were 4.75 cents to 9 cents higher, with January at $5.97 a bushel.
Treasury bond futures declined in a steep selloff, triggered by an afternoon decline in the value of the dollar, said Joel Karlin, research director in Chicago for Research Department Inc.
A higher U.S. gross national product figure for the third quarter supported the dollar in early trading, but technical market factors sent the dollar retreating in the afternoon, Karlin said.
The Treasury bond futures contract for delivery in December at the Chicago Board of Trade was down 28/32 point at 88 22/32 points.
Cotton futures posted strong advances on the Cotton Exchange in New York as industry data showed increased consumption last month over a year earlier, said Ernest Simon, cotton specialist with Prudential-Bache Securities.
"It was a very good consumption report, which showed 31,206 bales a day used in October versus 30,115 a year earlier," he said.
While the National Cotton Council October figures were down 1.79% from September, economists said this was not of particular concern because the usage rate so far this year is well above 1986 levels.
Cotton closed 0.55 cent to 1.87 cents higher, with December at 70.85 cents a pound.
Unleaded gasoline futures advanced, but most other energy contracts closed lower on the New York Mercantile Exchange.