Hog futures bounced 3% on Monday, the largest single-day leap this year as packers gear up for Easter.
After stagnating last week, lean hog futures for April delivery rose over 2 cents to 70.225 cents a pound on the Chicago Mercantile Exchange — the largest gain since December.
Rising pork prices — particularly in the run up to the Easter holiday on April 16 — had traders betting that meat packers would be willing to pay dealers good money on hogs in cash sales. Monday’s bump came despite lackluster cash prices, which fell from the previous day’s trades.
With live cattle costing almost 50 cents more a pound than hog, analysts said there was plenty more room for further increases.
“The hog market is starting to catch up,” said Mike Zuzolo, president of Global Commodity Analytics. “Processors are going to move forward with purchasing Easter meat sooner rather than later.”
A number of other factors buoyed the livestock market, Mr. Zuzolo said, from a bird flu outbreak in China, which creates the potential for increased pork consumption in the country, to drought in the U.S. southern plains affecting hay supply.
A late selloff in live cattle futures all but erased Monday’s gains, however, with April contracts finishing up 0.1% at $1.17750 a pound.
High wholesale beef prices have strengthened the market by encouraging packers to keep buying cattle. Processors enjoyed a margin of $121.40 a head Monday, according to the HedgersEdge packer margin index.
Those prices are unlikely to last for long though, analysts say, and beef prices last year peaked on March 17.
Wheat futures fell sharply on Monday as U.S. as traders stood by bets for big harvests this year.
Despite a drought in parts in the southern plains that could damage the winter wheat crop there, a multiyear glut has many traders unwilling to put money into the grain. A Commitment of Traders report on Friday showed managed funds betting that wheat prices would fall.
“You’re talking about a commodity that has lost lots of competition around the world,” said Arlan Suderman, chief commodities economist at INTL FCStone. “With the funds selling off commodities in recent days, wheat is one they particularly like to sell.”
Most actively traded May wheat futures dropped 2.3% to $4.30 1/2 a bushel on the Chicago Board of Trade, ending its fifth consecutive day of losses with the lowest close since Jan. 30.
Robust corn exports did little to help that grain’s price. May corn futures lost 0.9% of their value, closing at $3.61 a bushel. That wiped out all of the gains made so far in 2017, pushing corn to its lowest close since Dec. 30.
Forecasts for a major corn harvest in Brazil later this year have analysts questioning whether U.S. farmers will be able to export enough corn to make a dent in stockpiles before international buyers turn to South America.
After bearing the worst of last week’s selling, soybean futures largely stabilized, closing down 0.1% to $10.06 a bushel.
Oil prices edged lower on Monday as investors weighed growing U.S. supply against OPEC’s plan to restore market equilibrium by cutting production.
Light, sweet crude for April delivery settled down 9 cents, or 0.2%, at $48.40 a barrel on the New York Mercantile Exchange, closing out the sixth consecutive session of losses. Brent, the global benchmark, was near flat at $51.36 a barrel.
Gasoline futures lost 1.2% to $1.5807 a gallon, and diesel futures fell 0.2% to $1.5006 a gallon, both closing out their fourth straight session of losses.
Natural gas prices rose for the fourth session in a row on Monday, as cold weather forecasts pointed to increased demand before the end of winter.
Futures for April delivery settled up 3.5 cents, or 1.2%, at $3.0430 a million British thermal units on the New York Mercantile Exchange, trading at a one-month high. Prices are up 12 out of the past 14 sessions.
Expectations for snowstorms and below-average temperatures in the near term have given natural gas prices a boost, after an unusually warm winter weighed on seasonal demand throughout February.
Gold prices rose, with the April contracts gaining 0.1% to $1,203.10 a troy ounce.
The Dow Jones Industrial Average and U.S. government bond prices slipped Monday as investors looked ahead to a key meeting of the Federal Reserve later this week.
The Dow fell 22 points, or 0.1%, to 20881. The S&P 500 inched up less than 0.1% to 2373, and the Nasdaq Composite rose 0.2% to 5875.