Chicago | Reuters — U.S. lean hog futures closed higher on Friday for a second session on expectations of increased export demand for U.S. pork after rival supplier Germany confirmed a case of African swine fever in a wild boar.
Chicago Mercantile Exchange (CME) October lean hog futures settled up 2.2 cents at 66.575 cents/lb. after reaching 68.725 cents, the contract’s highest since March 11 (all figures US$). CME December hogs ended up 3.15 cents at 66 cents/lb.
Germany’s agriculture ministry said on Friday that its exports to China, the world’s top pork consumer, had stopped. South Korea has also banned German pork.
“That leaves Brazil and the United States best positioned to get that business,” said Arlan Suderman, chief commodities economist for StoneX.
Increased sales to China could push up U.S. pork prices and prompt U.S. consumers to buy more beef, Suderman said. Expectations for stronger beef demand helped support CME cattle futures, he said.
CME October live cattle futures settled up 0.425 cent at 105.525 cents/lb. and October feeder cattle ended up 0.975 cent at 140.575 cents/lb.
However, wholesale beef prices softened this week. USDA reported choice boxed beef cutout value at $219.89/cwt on Friday afternoon, down 94 cents from Thursday and down nearly $6 from a week ago.
Meanwhile, U.S. capacity to process hogs into pork and cattle into beef is being limited by efforts to physically separate meat-packing workers in plants to lower the risks of spreading COVID-19, analysts said.
— Reporting for Reuters by Julie Ingwersen and Tom Polansek in Chicago.