Chicago | Reuters — U.S. lean hog futures rallied to two-month high on Tuesday, their third straight day of gains, as investors scrambled to cover shorts amid concerns about supplies and signs of cash market strength, traders said.
Live cattle futures were weaker, with abundant supplies continuing to weigh on the market.
Concerns about African swine fever in China boosting export demand for pork from that country helped the hog market.
“Higher cash, higher pork, China issues, and a rare net fund short position all playing into the explosive upside in recent days,” INTL FCStone said in a note to clients.
Chicago Mercantile Exchange April lean hogs firmed 0.75 cents, to 63.6 cents/lb., peaking at 63.85 (all figures US$). The front-month contract hit its highest since Jan. 10 on a continuous basis.
June hogs rose 0.275 cents, to 80.225 cents.
The closely watched cash pork carcass cutout price was up $1.20 on Tuesday at $67.62/cwt.
The U.S. Department of Agriculture quoted average cash hog prices in the Iowa and southern Minnesota market up $1.53/cwt on Tuesday.
China has banned imports of pigs, wild boars and related products from Vietnam after the Southeast Asian country reported a series of outbreaks of highly contagious African swine fever, China’s General Administration of Customs said on Tuesday.
Chicago Mercantile Exchange April live cattle dropped 2.65 cents, to 126.35 cents/lb.
Feeder cattle also dropped, with April shedding 1.725 cents to 144.25 cents/lb.
Wholesale beef prices firmed for a ninth straight day on Monday. USDA quoted the choice cutout at $228.22/cwt, up 86 cents from Monday, and select cuts at $220.35, up 72 cents.
— Mark Weinraub is a Reuters commodities correspondent in Chicago.