Chicago | Reuters — Strong export demand for U.S. pork pushed Chicago Mercantile Exchange lean hog futures to a four-month high on Friday.
Traders are optimistic China, the world’s biggest pork consumer, will remain a strong buyer, after the U.S. Department of Agriculture reported strong weekly export sales on Thursday.
Chinese importers have been bringing in huge volumes of meat to fill a domestic supply shortage created by a deadly swine disease, African swine fever, that killed millions of pigs in China.
“The hogs have been on a big run,” said Don Roose, president of Iowa-based broker U.S. Commodities.
Chicago Mercantile Exchange October lean hogs settled up 0.575 cents at 59.825 cents/lb. and set their highest price since May 4 (all figures US$).
Chinese demand should be strong through the end of the year, Dan Halstrom, president of the industry group U.S. Meat Export Federation, said in a statement.
The United States exported 69,793 tonnes of U.S. pork to China in July, up from 60,453 tonnes a year earlier, according to the latest official USDA data. From January to July, exports reached 646,860 tonnes, up from 237,487 a year earlier.
Profit margins for meatpackers on Friday were $54.35 per hog, up from $46.80 a week ago, according to Denver-based livestock marketing advisory service HedgersEdge.com.
“The packers are bidding up for hogs because domestic demand has been strong,” Roose said.
Traders remain uncertain about U.S. demand for beef after the summer grilling season comes to its traditional end on the Labour Day holiday on Monday. Closures of restaurants, school cafeterias and event spaces such as hotel ballrooms due to the COVID-19 pandemic are making demand more uncertain, analysts said.
CME October live cattle futures rose 0.525 cent to 104.45 cents/lb. October feeder cattle futures ended 0.175 cent firmer at 138.5 cents/lb., after earlier touching their lowest price since July 10.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.