Pork futures prices rose sharply Tuesday as traders snapped up contracts for delivery of hogs and frozen pork bellies following a surprisingly small increase in slaughter numbers.
On other markets, grain and soybean futures were mixed, precious metals were mixed, energy futures declined and stock index futures advanced.
The pork complex on the Chicago Mercantile Exchange began rallying after the midday release of hog marketing numbers, said Tom O'Hare, an analyst in New York for Smith Barney, Harris Upham & Co.
Many traders had sold borrowed contracts, thinking that hog runs would be relatively large this week as weather conditions improved in the hog-producing Midwest and northern Plains states, O'Hare said.
But Tuesday's slaughter and marketing numbers fell well below traders' expectations, sparking a flurry of buy orders as many traders sought contracts to cover their obligations.
In addition to the smaller-than-expected hog runs, the supply of pork bellies stored in freezers has fallen in the past week, fueling a rise in frozen pork belly futures, O'Hare said.
Most pork belly contracts rose the 2-cents-a-pound limit allowed for daily trading, and hog contracts for near-month delivery also jumped.
Cattle futures settled mostly higher, with many contracts posting new contract highs on stronger cash prices and spillover buying from the pork pits, O'Hare said.
Corn Futures Gain
Live cattle settled 0.08 cent lower to 0.53 cent higher, with the contract for delivery in February at 72.20 cents a pound; feeder cattle were 0.25 cent to 1.15 cents higher, with March at 83.22 cents a pound; hogs were 0.40 cent to 1.45 cents higher, with February at 49.07 cents a pound, and frozen pork bellies were 0.80 cent to 2 cents higher, with February at 56.32 cents a pound.
Corn and soybean futures settled higher on the Chicago Board of Trade while wheat finished lower.
Soybean prices advanced in anticipation of new soybean oil export business and also on a late surge in the soybean meal futures.
Tables, Page 10