By Theopolis Waters
CHICAGO, Oct 24 (Reuters) – Chicago Mercantile Exchange hog futures closed higher to sharply higher on Thursday in reaction to talk that cooler weather has reignited the spread of a virus deadly to baby pigs in North Carolina, the country’s No. 2 hog producer, traders said.
Porcine Epidemic Diarrhea Virus (PEDv) has spread to about 250 farms since June, Tom Ray, North Carolina’s director of livestock health, told Reuters on Thursday. While the disease continues to spread, Ray said it appears the rate of that spreading is slowing.
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Investors bought deferred CME hogs in the belief that the virus would reduce supplies in 2014.
The December hog contract was pushed higher in part because of its discount to latest CME lean hog index, which was 91.25 cents per pound.
December hogs closed 1.450 cents higher at 89.600 cents per lb. and February rose 1.650 cents at 91.850 cents.
RECORD CASH PRICES LIFT CATTLE
Record-high cash cattle prices this week and brisk wholesale beef sales this week underpinned CME live cattle for a fifth consecutive session.
On Wednesday, slaughter cattle in Texas and Kansas traded at record high of $132 per hundredweight, the result of a smaller herd and rising beef prices, analysts and economists said.
“People likely have this week’s cash prices dialed in are looking ahead to next week’s sales,” a trader said.
Some investors may sell futures soon with the view that packers might lower cash bids next week to improve operating margins.
October live cattle futures closed 1.000 cent higher at 132.800 cents per lb and December rose 0.125 cent to 132.875 cents.
CME feeder cattle fell on lower deferred live cattle futures and on technical selling.
October feeder cattle closed at 165.550 cents per lb., down 0.600 cent, while November closed at 166.950 cents, down 0.675 cent.
