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Lean hog prices vanquish swine fever jitters

25 October 2018, at 12:00am

Chicago Mercantile Exchange lean hog futures surged on Wednesday as concerns about the spread of African swine fever, particularly in China, fuelled buying that took some contracts up by as much as their daily trading limits

Additional support in actively traded December futures stemmed from the contract's discount to cash hog prices, analysts and traders said.

"One, December hogs had too big a discount; and two, African swine fever continues to spread ... that was enough to tip us over," said Don Roose, president of Iowa-based US Commodities.

Concerns about the spread of the disease in China, the world's largest hog and pork producer, have underpinned prices since it was first detected in early August.

China's agriculture ministry said on Wednesday it would ban the feeding of kitchen waste to pigs after linking the practice to the majority of the country's early cases.

Beijing has reported more than 40 cases of African swine fever and the disease, which does not affect humans, has spread across 12 provinces and municipalities.

CME December lean hog futures settled up the daily 3.000-cent trading limit at 57.525 cents per pound, narrowing their discount to the CME lean hog index, which was most recently quoted at 65.95 cents.

The contract climbed past its 20-, 30- and 50-day moving averages and closed just below its 200-day moving average.

The daily trading limit will expand to 4.5 cents following the limit-up close.

Live cattle futures also advanced, lifted by rising cash beef prices and expectations for firming cash cattle prices in the coming weeks.

Source Reuters