COMMODITIES : Pork Futures Surge on Rising Demand

Pork futures prices climbed sharply Thursday on the Chicago Mercantile Exchange as cash markets reflected strong demand for pork products and chart signals indicated that the market was ripe for a rally.

Most cattle futures also advanced.

On other markets, energy futures were higher, grains and soybeans were mixed, gold gained slightly and stock index futures retreated.

The movement of hogs to market this week has been running about equal to a year ago but slaughters are up and so are prices, said Tom O’Hare, an analyst in New York with Smith Barney, Harris Upham & Co.

“Today, more than anything, I think the cash markets did a little better than most people had thought,” he said. “And with beef as high as it is, I think retailers are probably going to be featuring more pork, so the demand is there, too.”

Energy Futures Higher

Technical factors also played a role in Thursday’s rally, especially in the pork belly pit, where prices have been trending lower because of a glut of frozen bellies.

Cattle futures advanced on follow-through buying from Wednesday’s strong close. Steady cash markets gave the cattle market additional support, O’Hare said.

Live cattle settled 0.05 cent to 0.55 cent higher, with the contract for delivery in June at 72.15 cents a pound; feeder cattle were 0.08 cent lower to 0.30 cent higher, with May at 79.75 cents a pound; hogs were 0.15 cent to 1.20 cents higher, with June at 51.65 cents a pound, and frozen pork bellies were 0.28 cent lower to 1.20 cents higher, with May at 52.37 cents a pound.

News reports of a fiery explosion at a Shell Oil Co. refinery in Norco, La., boosted energy futures prices on the New York Mercantile Exchange.

“That set the tone right off the bat with people buying gasoline outright as a supply hedge and, as a speculative trade, buying gasoline and selling crude against it,” said John Azarow, an analyst in New York with Shearson Lehman Hutton.

The positive technical implications of Thursday’s higher opening and the June crude oil contract’s close above $17.37 a barrel “should bode for higher prices,” Azarow said.

West Texas Intermediate crude oil settled 1 cent lower to 19 cents higher, with June at $17.39 a barrel; heating oil was 0.37 cent to 1.68 cents higher, with June at 46.57 cents a gallon, and unleaded gasoline was 0.40 cent to 0.89 cent higher, with June at 50.61 cents a gallon.

Wheat Slumps

Grain futures settled lower on the Chicago Board of Trade, while soybean prices advanced in response to new crop weather forecasts, analysts said.

Private forecasts suggested that the amounts of rain this weekend in the western Corn Belt could be lighter than anticipated. With soybean planting just getting under way, the market is especially sensitive to any indications of dry weather.

Wheat continued to slump in anticipation of a plentiful winter wheat harvest, analysts said, while corn drifted lower amid sluggish export demand.

Wheat settled 3.50 cents to 4.75 cents lower, with May at $2.9675 a bushel; corn was 1 cent to 2 cents lower, with May at $2.03 a bushel; oats were 0.25 cent to 1 cent lower, with May at $1.60 a bushel, and soybeans were 4.25 cents to 6 cents higher, with May at $6.895 a bushel.

Gold and silver futures prices rose slightly on New York’s Commodity Exchange in sluggish trading marked by a lack of influential news, analysts said.

Gold settled 40 cents to $1.40 higher, with June at $447 an ounce. Silver was 3.5 cents to 3.7 cents higher, with May at $6.364 an ounce.

Stock index futures retreated slightly on the Chicago Mercantile Exchange, where the contract for June delivery of the Standard & Poor’s 500 index settled 0.50 point lower at 259.35.

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