Chicago Mercantile Exchange lean hog futures extended a sharp rally on Wednesday, touching contract highs for the fourth consecutive day on limited supplies and strong pork prices.
U.S. pork demand is strong as sales have benefited after households received additional COVID-19 pandemic relief money from the federal government, analysts said.
The U.S. Department of Agriculture pork cutout value edged up by $0.73 to $111.91 per cwt for carcasses, with gains in ribs, butts, hams and bellies used to make bacon.
Supplies of hogs to meet the demand for pork are tight, after some farmers euthanized hogs or performed abortions on pregnant sows last year as slaughterhouses closed during COVID-19 outbreaks among workers.
Outbreaks of a pig disease known as porcine reproductive and respiratory syndrome (PRRS) have also limited the size of the herd, analysts said.
CME most-active June lean hogs set a new contract high of 114.575 cents per pound and settled up 0.875 cent at 114.425 cents per pound. July hogs set a contract high for the fourth consecutive day and ended up 1.050 cents at 114.475 cents per pound.
June live cattle futures jumped 1.4 cents to end even with June hogs at 114.425 cents per pound, an extremely rare occurrence. August feeder cattle futures climbed 2.050 cents to 145.225 cents per pound.
Export demand remains robust for U.S. pork and beef, though analysts said high prices and shortages of shipping containers are limiting factors.
March U.S. pork exports were record-large at 294,724 tonnes, up 1% from a year earlier, according to the industry group U.S. Meat Export Federation, following the release of monthly U.S. Department of Agriculture data. Exports also set a new value record at $794.9 million, which was up 4%, the federation said.
Traders on Thursday will review weekly USDA export sales data for pork and beef.