US hog market jumps on hope China buys more pork
CHICAGO - US hog prices bounded higher on Tuesday and shares of top pork producer Smithfield Foods Inc rose on speculation that China may be soon buy more U.S. pork, analysts and livestock traders said, writes Bob Burgdorfer.
21 November 2007
3 minute read
Smithfield, the nation's largest hog and pork producer, denied it has made any new deals for pork with China.
That did not deter investors who sent Chicago Mercantile Exchange hog futures prices up the daily trading limit and Smithfield's shares up more than 3 percent at the New York Stock Exchange.
In August, Smithfield announced a deal to sell 60 million lbs of pork to China for delivery through December. China is expected to buy more US pork, but when and how much is not known.
"Given their needs in China, they are going to be back in the market over the next several months," said Jim Robb, economist at the Denver, Colorado-based Livestock Marketing Information Center. "There are still lingering impacts of the swine disease problem."
The disease, Porcine Reproductive and Respiratory Syndrome or blue ear disease, killed more than a million Chinese hogs earlier this year. Although a vaccination program is bringing the disease under control, the outbreak sent Chinese pork prices higher and prompted talk that Beijing will import pork to help bring meat prices down.
On the year through September, China and Hong Kong combined have bought nearly 105,200 metric tons of US pork, up 71 percent from a year earlier, according to government data compiled by the US Meat Export Federation.
That has moved China/Hong Kong past Canada as the third largest export market for US pork so far this year.
Fueling some of Tuesday's rumors regarding a new China deal was news that Smithfield will run its Sioux City, Iowa, pork plant on Sunday. Hog traders had assumed the Sioux City plant's extra production was for new China business, but Smithfield said it was due to an abundance of hogs.
Source: Reuters
That did not deter investors who sent Chicago Mercantile Exchange hog futures prices up the daily trading limit and Smithfield's shares up more than 3 percent at the New York Stock Exchange.
In August, Smithfield announced a deal to sell 60 million lbs of pork to China for delivery through December. China is expected to buy more US pork, but when and how much is not known.
"Given their needs in China, they are going to be back in the market over the next several months," said Jim Robb, economist at the Denver, Colorado-based Livestock Marketing Information Center. "There are still lingering impacts of the swine disease problem."
The disease, Porcine Reproductive and Respiratory Syndrome or blue ear disease, killed more than a million Chinese hogs earlier this year. Although a vaccination program is bringing the disease under control, the outbreak sent Chinese pork prices higher and prompted talk that Beijing will import pork to help bring meat prices down.
On the year through September, China and Hong Kong combined have bought nearly 105,200 metric tons of US pork, up 71 percent from a year earlier, according to government data compiled by the US Meat Export Federation.
That has moved China/Hong Kong past Canada as the third largest export market for US pork so far this year.
Fueling some of Tuesday's rumors regarding a new China deal was news that Smithfield will run its Sioux City, Iowa, pork plant on Sunday. Hog traders had assumed the Sioux City plant's extra production was for new China business, but Smithfield said it was due to an abundance of hogs.
Source: Reuters
