Hog prices marked the biggest two-day gain since 2009 on speculation that hot weather will restrict movement of animals, limiting the amount available to slaughterhouses. Cattle also rose.
Temperatures in the U.S. Midwest may top 100 degrees Fahrenheit (38 degrees Celsius) today, AccuWeather Inc. said. Farmers will keep hogs indoors and not move them to prevent illness and weight loss during unusually hot weather, Dennis Smith, a senior account executive at Archer Financial Services Inc., said by telephone.
“It’s easier to keep them in the barns and keep them cool than move them in the heat,” Smith said. “That’s why you’re seeing some unexpected strength in prices.”
Hog futures for August settlement surged 2.4 percent to settle at 93.9 cents a pound at 1 p.m. on the Chicago Mercantile Exchange. The price gained 5.5 percent in two sessions, the most since Oct. 8, 2009.
Cattle futures for August delivery advanced 1.8 percent to $1.19325 a pound in Chicago, the biggest gain since May 3. The price of wholesale beef rose 0.8 percent in the previous two days, indicating higher demand, Jason Britt, the president of brokerage Central States Commodities Inc. in Kansas City, Missouri, said by telephone.
Feeder-cattle futures for August settlement rose 1.1 percent to $1.5045 a pound on the CME, also the biggest increase since May 3.