By Joanna Levin
PIG prices in the USA have soared. Last week, pigs were fetching about 40¢/lb. This week they are making up to 48¢/lb in parts of Illinois.
The 20% jump in prices is partly attributed to the drop in the daily slaughter rate to 334,000 animals, compared with 355,000 head a week ago.
But fewer slaughterings are insufficient to justify higher prices, many analysts fear. These traders believe that the cash market is overextended after its recent rally and are predicting a price correction. Packers reluctance to do much forward pricing is being taken as another sign that the market may be heading for a fall.
This cautious attitude is reflected in futures prices, which came off sharply yesterday (19 May). The Chicago lean hog June futures contract closed at 61.97¢/lb, down 0.68¢ since Monday but still up 0.30¢ on last week.