Chicago | Reuters — U.S lean hog futures jumped to a four-month high on Thursday on strong export demand and short covering, while cattle futures weakened.
The U.S. Department of Agriculture reported net U.S. pork export sales of 53,646 tonnes for the week ended Aug. 27, up 36 per cent from the previous week. China, the world’s top pork consumer, was the top buyer, snapping up 28,712 tonnes.
Chinese importers have been bringing in huge volumes of meat to fill a large domestic supply shortage after an epidemic of a deadly swine disease, African swine fever, killed millions of pigs in China.
Mexico purchased 14,705 tonnes of U.S. pork, making it the second biggest buyer last week, according to USDA data.
“China and Mexico were certainly leading the parade,” said Altin Kalo, agricultural economist for Steiner Consulting.
Chicago Mercantile Exchange October lean hogs settled up 2.85 cents at 59.25 cents/lb. and set their highest price since May 5 (all figures US$).
In the beef market, CME October live cattle futures ended down 0.55 cent at 103.925 cents/lb. October feeder cattle tumbled 1.125 cents to 138.325 cents/lb. and touched their lowest price since July 10.
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. Beef and cattle prices are often weak this time of year as demand eases.
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.
“I think the market is recognizing that we’re seeing this seasonal dip coming at us, and it’s adjusting for that,” Kalo said.
Prices for choice cuts of boxed beef fell by 67 cents, to $226.91/cwt, while select cuts slid 79 cents, to $213.03, according to USDA.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.