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CME lean hog future prices highest since April 2018

4 October 2018, at 12:00am

Chicago Mercantile Exchange lean hog futures rose for the fourth consecutive session on Wednesday (3 October) and touched their highest prices in more than five months

CME October hogs traded up to 67.550 cents per pound, the contract's highest price since 20 April, before paring gains. It ended up 1.050 cents to 67.475 cents per pound.

Deferred contracts ended lower amid concerns about increasing supplies, traders said. December hogs slipped 2.000 cents to 57.150 cents per pound.

The US Department of Agriculture said on Wednesday the average weight for hogs in the week ended 29 September was 280 pounds in a reporting district that includes Iowa, southern Minnesota and South Dakota. That was down 0.7 percent from a year ago.

In recent weeks, average weights were down more than 1 percent from the previous year, and the smaller year-on-year decline fuelled worries that rising hog weights would expand supplies, said Rich Nelson, chief strategist for Illinois-based broker Allendale.

"We had a little market concern about this morning's weekly hog weight report," he said.

Increasing supplies are a concern because China has imposed tariffs on imports of US pork as part of a trade row between the world's two largest economies. Exports of US pork parts to China have declined as a result, leaving more supply on the domestic market.

Reporting by Tom Polansek
Editing by James Dalgleish