Pork Futures Prices Gain

Pork futures prices soared higher Thursday with some pork belly contracts advancing the limit allowed for daily trading.

The nearby belly contract has posted strong or limit advances every day for nearly three weeks, gaining more than 21 cents in this period. July bellies settled Thursday at 89.40 cents a pound at the Chicago Mercantile Exchange.

“We could see $1 bellies again,” said Philip Stanley, an analyst in Chicago with Thomson McKinnon Securities Inc. Belly futures were last selling for more than $1 in mid-1982.

With tight deliverable supplies, Stanley said, traders who are long (holding an excess of purchases over sales) are making the shorts pay dearly to make offsetting purchases.

“The demand for bacon is not there (to justify the rapid price rise),” Stanley said. “It’s purely a supply deal.”

Live hog futures rallied on higher cash prices and expected increases again Monday. Cattle futures behaved perversely, Stanley said, with bullish factors in the market but declining prices at the close. “Packers don’t own a lot of cattle so they’ll be forced to come into the market on Monday,” forcing cash prices even higher, Stanley added.