COMMODITIES-Lean hogs at 2011 peak, cattle at new high; oil down

Thu Feb 27, 2014 4:51pm EST

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(Reuters is considering dropping the daily commodities wrap
after March 10 and publishing the report on a discretionary
basis. Please send any comments on this move to Josephine Mason
at josephine.mason@thomsonreuters.com)
    By Barani Krishnan
    NEW YORK, Feb 27 (Reuters) - Lean hogs, one of the smaller
U.S. commodity markets, pressed on with this week's powerful
rally to reach 2011 highs on Thursday after Russia said it would
resume American pork imports, while cattle prices hit record
highs.
    Bigger raw materials markets from oil to gasoline
, natural gas, copper, aluminium 
and wheat posted losses as players squared positions ahead
of February's close on Friday.    
    Live cattle <0#LC:>, raw sugar, arabica coffee
, soybeans and cotton rose along with lean
hogs on a combination of speculative and demand-driven buying.
  
    The Thomson Reuters/Core Commodity Index, a
bellwether for basic resource prices, settled flat for a second
straight day after the mixed performance across the complex.
    Lean hog futures, a $12 billion market compared to the $48
billion for soybean futures, took center stage as prices rose
for a third day in a row.    
    Worries about tighter supplies have turned the spotlight on
U.S. meat markets lately. Lean hog prices are up nearly 22
percent on the year and live cattle futures are up almost 12
percent, making them the second and third best performers on the
Thomson Reuters/Core Commodity index this year after arabica
coffee.
    In Thursday's session, the front-month contract for lean
hogs finished up 2.8 percent at $1.0385 a lb after
hitting an August 2011 high at $1.04025.
    Traders attributed the latest run-up to Russia's
announcement on Thursday that it plans to resume around March 10
pork imports from the United States.
    "I would think it's driving the market. It means we will
have more people needing pork in anticipation of tightening
supply," said James Burns, president of Chicago-based JBS
Trading Co.
    Russia banned most meat imports from the United States early
last year due to concerns over the use of the feed additive
ractopamine.
    Ractopamine is a growth stimulant used to make meat leaner.
It is banned in some countries because of concerns it could
remain in the meat and cause health problems, despite scientific
evidence showing it to be safe.
    Live cattle's front-month contract finished up nearly
1 percent at $1.50050 a lb after setting a new high at $1.50950.
    Prices at 4:30 p.m. EST (2130 GMT)      
                             LAST/      NET    PCT
                             CLOSE      CHG    CHG
US crude             102.23    -0.36  -0.4%
Brent crude         108.97    -0.55  -0.5%
Natural gas           4.511   -0.030  -0.7%
                                                              
US gold             1328.20     0.00   0.0%
Gold                1330.66    -0.04   0.0%
US Copper              3.24    -0.01  -0.2%
LME Copper         7025.00    -1.00   0.0%
Dollar               80.274   -0.154  -0.2%
CRB              301.590   -0.024   0.0%
                                                          
US corn               448.00    -7.50  -1.7%
US soybeans          1393.50   -13.75  -1.0%
US wheat              582.25   -17.75  -3.0%
                                                          
US Coffee            178.75     1.65   0.9%
US Cocoa            2933.00    24.00   0.8%
US Sugar              17.44     0.15   0.9%
                                                          
US silver            21.314   21.101   1.6%
US platinum         1453.40    24.30   0.0%
US palladium         742.25    10.75   1.5%

 (Editing by Meredith Mazzilli)
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