Chicago | Reuters — U.S. lean hog futures ended lower on Friday on profit-taking and disappointment over export demand, after prices climbed to the highest level in 11 months.
Strong domestic demand for pork continues to underpin hog futures, analysts said, with the most-active December contract surging 39 per cent on the Chicago Mercantile Exchange since August.
CME December lean hogs finished 0.075 cent lower at 69.8 cents/lb., after touching its highest since Nov. 29, 2019 (all figures US$).
Uncertainty over export demand rattled the market, brokers said, after Germany’s agriculture minister said he received signals that Asian nations may ease bans on German pork.
China and other Asian countries halted German imports when Germany confirmed cases of African swine fever in wild boar in September. The bans raised expectations that Asian demand would increase for U.S. pork.
“While China has bought U.S. pork since, we are not seeing the increase that was hoped for,” said Karl Setzer, commodity risk analyst for AgriVisor.
“China is now buying pork from other European Union countries and satisfying much of their demand with that supply.”
U.S. pork export sales for the week ended Oct. 8 were 26,800 tonnes for 2020 delivery, down 56 per cent from the previous week and 43 per cent from the prior four-week average, according to the U.S. Department of Agriculture. For 2021 delivery, net sales were 1,600 tonnes.
Weekly U.S. beef sales were 13,400 tonnes for 2020, down 35 per cent from the previous week and 31 per cent from the prior four-week average, USDA said.
Traders worry that food service demand for beef may weaken in the United States and other nations due to COVID-19 outbreaks that could keep consumers at home.
CME December live cattle futures dipped 0.925 cent, to 108.625 cents/lb., and hit its lowest price since Sept. 9. January feeder cattle tumbled 2.775 cents, to 129.325 cents/lb., and touched its lowest price since May 5.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.