Chicago Mercantile Exchange (CME) lean hog futures rallied from a six-month low on Tuesday on fund short-covering and technical buying, and as cash pork prices strengthened, Reuters reported, citing analysts.
Pork packer margins have also emerged from the red, fueling expectations of improving demand for hogs to expand the slaughter, they said.
"The hogs got very oversold from a technical standpoint and the large speculators had already gotten short in the market, which they rarely do," said Doug Houghton, analyst with Brock Capital Management.
"There was some positive cash action and the cutout value was up $2 and change ... And packer operating margins have come out of the red and that offers hope that packers will be chasing supplies more," he said.
The actively traded July hog contract fell to a low of 98.300 cents per pound, the weakest since December 4, before rallying to close the day at 101.650 cents per pound, up 1.800 cents.
Packer margins expanded to $5.55 per head on Tuesday, up from $5.20 on Monday and a negative 40 cents a week ago, according to livestock marketing advisory service HedgersEdge.
The pork carcass cutout value jumped $2.53 to $102.28 per hundredweight on Tuesday afternoon, its loftiest level since late October.
CME live cattle futures retreated on Tuesday in a long-liquidation break, with seasonally slowing beef demand and weaker cash market prices anchoring the market.
Feeder cattle followed live cattle lower despite the announcement of another New World screwworm case near the US-Mexico border that suggested Mexican cattle imports may remain suspended to contain the outbreak.
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