Chicago | Reuters — Chicago Mercantile Exchange hog futures weakened in the two most-active contract months on Friday as traders continued to dial in expectations for waning Chinese demand, analysts said.
China, the world’s biggest pork consumer, has sought to rebuild its hog herd after it was decimated by an outbreak of the deadly pig disease African swine fever. Declining import demand and hog prices in China may signal the country is succeeding in its recovery effort, analysts said.
“The evidence is getting more and more to the side of there’s plenty of pork there because they’re not buying as much from us,” said Steve Meyer, economist for U.S. consultancy Partners for Production Agriculture.
CME live hog futures for August delivery slipped 0.075 cent, to 100.225 cents/lb., after temporarily falling by the daily three-cent limit on Thursday.
August hogs have pulled back since setting a contract high of 120.55 cents/lb. on June 7. Traders said they are trying to determine the right price level for the market after the correction.
The U.S. Agriculture Department, in a weekly export sales report on Thursday, said China bought just 1,495 tonnes of U.S. pork in the week ended June 24. Pork export sales to all countries totaled about 28,600 tonnes.
It was just the latest round of disappointing sales to China, traders said. China bought 2,019 tonnes in the week ended June 17 and had net cancellations of 422 tonnes in the week ended June 10, according to USDA data.
In the beef market, CME August live cattle futures fell 1.575 cents, to 122 cents/lb. CME August feeder cattle rose 0.725 cent, to 157.05 cents/lb.
— Reporting for Reuters by Tom Polansek in Chicago.