Pork belly futures prices rose sharply Friday as big speculative players positioned themselves for what could be the beginning of a seasonal market rally.
On other commodity markets, livestock futures were mostly higher; most oil futures rose; grains and soybeans were mixed; and precious metals were mixed.Frozen pork belly futures settled .28 cent to the permitted daily limit of 2 cents higher on the Chicago Mercantile Exchange with the contract for delivery in May up 1.57 cents at 65.67 cents a pound.
Cattle futures finished .08 cent lower to .35 cent higher on the Merc with June at 76.47 cents a pound; feeder cattle were .10 cent to .40 cent higher with May at 88.45 cents a pound; hogs were unchanged to .75 cent higher with June at 58.45 cents a pound.
The spurt brought the belly market's cumulative gain to 4.27 cents since Monday, when talk of a large South Korean purchase of U.S. bellies began circulating in the market.
The Korean National Livestock Cooperatives Federation confirmed the rumors Wednesday, saying it bought 4.4 million pounds of frozen bellies from the Monfort Inc. division of ConAgra Inc.
Some traders believe the Koreans bought the bellies on behalf of the Soviet Union, which would suggest further large purchases are possible. Pork bellies are the part of a hog from which bacon is made.
Analysts said the unexpected Korean purchase assumed added importance because it followed a steep, three-week decline in futures prices and occurred at a time when the market normally begins a seasonal upswing linked to lighter hog marketings as farmers concentrate on planting and field work.
As the rebound gained strength on Wednesday and Thursday, more traders became convinced that it represented the beginning of the seasonal rally, which normally peaks in late June or early July.