Reuters reports that deferred contract months in the hog markets posted the biggest gains on Thursday 7 January, buoyed by fresh highs on Wall Street and expectations a Democrat-controlled Congress will deliver more stimulus spending to help the US economy recover from a pandemic-induced downturn.

"That is all money flowing in from index funds," Dan Norcini, an independent livestock trader said, "in anticipation of improving beef and pork demand as the year progresses, as the vaccines become more widespread and the lockdowns become more a thing of the past."

Front-month hog futures were pressured by ample hog supplies and lacklustre cash markets as meat packers work through backlogs caused by holiday shutdowns. CME February lean hogs ended down 0.650 cent at 69.125 cents per pound, at a premium to the CME's lean hog index at 62.42 cents.

"It's going to be hard to move February hogs higher if the cash isn't moving higher as well," Norcini said.

Tyson Foods Inc said it resumed slaughtering hogs at a plant in Columbus Junction, Iowa, three weeks after idling the facility because of a mechanical malfunction.

However, deferred hog futures found support from speculators investing in commodities as a hedge against inflation.

"There is a growing sense that the commodity sector as a whole is going to do very well in 2021," Norcini said. "So people are buying out in those further-out months, positioning for that."

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