Chicago | Reuters — U.S. lean hog futures rose to life-of-contract highs on Monday, extending steep gains from last week on optimism for robust exports of U.S. pork due to the worsening African swine fever virus outbreak in China, traders said.
China, the top world hog producer and pork consumer, has culled its swine herd as the highly contagious virus has spread. An outbreak was reported on Friday in Sichuan province, the country’s leading pig-herding region.
Data released on Friday by the U.S. Department of Agriculture showed large shipments of pork and new export sales, including 3,800 tonnes sold to Hong Kong. That suggested that buyers in China were turning to the global meat market.
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“The market had never come to terms with the disease outbreak. They’ve been waiting for some evidence of exports (to China),” said Archer Financial Services broker Dennis Smith.
“What we’ve been doing technically — it’s like a rocket launch,” he added.
Hog futures on the Chicago Mercantile Exchange surged by their three cents per pound daily price limits on Friday and then continued their climb when trade resumed on Monday.
Most-active February hog futures were up 2.275 cents to 69.025 cents/lb. (all figures US$). December hogs were up 0.95 cent to 61.025 cents, the highest in about seven months. The December contract has now gained eight out of the past nine sessions.
Live cattle futures were higher for the third straight session, with December ending up 0.8 cent to 116.150 cents/lb. and February cattle up 0.275 cent to 120 cents.
Traders were looking ahead to Wednesday’s USDA Cattle on Feed report that was expected to show Nov. 1 on-feed supplies at 104.4 per cent of a year ago.
— Michael Hirtzer reports on commodity markets for Reuters from Chicago.
