CHICAGO, Dec 3 (Reuters) - U.S. lean hog futures Tuesday rose 3.6 percent on Tuesday, supported by signs of strength in the cash market, traders said.
USDA data showed that cash prices for hogs in Iowa and Minnesota have risen by more than $2 since last Wednesday, evidence that the market may have found its seasonal bottom even as supplies remain plentiful.
“It is not a massive rally, but we have at least stopped putting in new lows every other day,” said Rich Nelson, chief strategist for brokerage Allendale.
Benchmark February lean hogs closed up 2.225 cents at 68.375 per pound at the Chicago Mercantile Exchange. The contract rose above its 10-day moving average after finding support from early weakness near Monday’s low.
The hog futures market notched its biggest gain in percentage terms since Nov. 5.
Ample frozen pork inventories in China will help to contain pork prices, an agriculture ministry official said on Tuesday. State reserves have been boosted with imports and commercial stocks, said Yang Zhenhai, director of the ministry’s animal husbandry and veterinary bureau, as Beijing comes under pressure to secure supplies ahead of the Lunar New Year holiday in late January.
China has stepped up its purchases of U.S. pork in recent months as a devastating outbreak of African swine fever has decimated its domestic herd.
February live cattle ended down 0.15 cent at 125.65 cents per pound. CME January feeder cattle futures rose 0.225 cent to 142.375 cents per pound.
Forecasts for better weather in key U.S. beef-producing regions hung over the cattle market. (Reporting by Mark Weinraub; editing by Jonathan Oatis)