Chicago | Reuters — Chicago Mercantile Exchange lean hog futures climbed to their highest prices in about six months on Friday on technical buying.
CME October hogs reached a session high of 68.825 cents/lb., the contract’s highest price since April 19, before paring gains (all figures US$). It ended up 0.7 cent/lb., at 68.2 cents. December hogs posted stronger gains, rising 2.225 cents/lb., to 57.55 cents/lb.
The market has rebounded about 40 per cent since the front-month contract neared a two-year low on Aug. 30.
“We got overextended and snapped back,” said Peter Adams, a broker for Illinois-based firm Allendale.
Hog prices have been under pressure from the U.S.-China trade war since Beijing imposed tariffs on imports of U.S. pork as part of the dispute. Exports of U.S. pork parts to China have declined as a result, leaving more supply on the domestic market.
Large supplies are also looming over cattle markets, after U.S. ranchers expanded their herds to take advantage of low prices for feed grains and strong demand for beef.
CME live cattle futures ended mixed, with the October contact settling up 0.175 cent at 113.8 cents/lb. Most active December lost 0.225 cent to close at 118.15 cents.
CME October feeder cattle finished 0.8 cent higher at 157.775 cents/lb.
Fed cattle in Texas and Kansas traded lightly at $111/cwt in the cash market, mostly steady with a week earlier, according to traders.
Livestock traders will digest a U.S. Department of Agriculture supply and demand report next Thursday that will provide an update on supplies of U.S. corn and soy. The crops are used to feed animals, and increased supplies could make it less expensive to produce livestock.
— Tom Polansek reports on agriculture and commodity markets for Reuters from Chicago.