Hog futures climbed, heading for the biggest gain in a week, on speculation that U.S. grocers are increasing purchases before the Labor Day holiday. Cattle prices also rose.
Wholesale-pork prices added 1.4 percent last week, the third straight weekly gain, government data show. Grocers tend to buy more before the Labor Day holiday on Sept. 2, when people usually barbecue and meat demand rises.
“You should have some buying interest coming in from Labor Day weekend,” Mark Schultz, a chief analyst at Northstar Commodity Investment Co., said in a telephone interview from Minneapolis. There’s “pretty good movement, too, for the pork,” he said.
Hog futures for October settlement gained 1.6 percent to 86.35 cents a pound at 9:48 a.m. on the Chicago Mercantile Exchange, heading for the biggest increase for the most-active contract since Aug. 5.
Cattle futures for October delivery rose 0.4 percent to $1.27425 a pound on the CME. Prices added 1.9 percent last week.
The commodity surged the most in six months on Aug. 8 after Tyson Foods Inc. (TSN:US), the biggest U.S. meat processor, said that it would ban purchases of cattle fed Zilmax, a feed supplement made by Merck & Co., effective Sept. 6. Prices will go higher if other processors ban the use of the drug, meaning fewer cattle coming to market, Schultz said. Cargill Inc. said that it plans to keep buying animals fed additives.
Feeder-cattle futures for September settlement advanced 0.4 percent to $1.5805 a pound.
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