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Expect firmer prices in the US pork market this week

Traders and livestock producers are expecting firmer cash prices after the cash market rose last week.

19 September 2019, at 9:41am

Futures and cash prices fell last month when a fire at a Tyson Foods slaughterhouse in Kansas removed a major buyer from the market. Meat packers increased slaughtering at other plants to take advantage of soaring profit margins after the fire, offsetting the shuttered plant's effect on the market.

"The cash market we think got too low vs. the demand," said Don Roose, president of Iowa-based broker US Commodities. "Now we're trying to bubble back up."

In the pork market, cutout values were lower for carcasses, loins, butts and bellies, according to the USDA, as large US supplies loom over the hog market.

Packers slaughtered an estimated 488,000 hogs on Wednesday, up from 487,000 a week ago and 436,000 a year ago, according to the USDA.

"The cash and the cutout continue to flag lower," Roose said.

CME October lean hog futures gained 0.825 cent to 62.925 cents per pound. December lean hog futures rose 0.125 cent to 67.800 cents per pound

Today (19 September), traders will review weekly USDA export sales data for Chinese purchases of US pork.

China, the world's largest pork consumer, has imposed retaliatory tariffs on imports of US farm goods including pork because of the countries' trade war. But China needs more meat because it is suffering a widespread outbreak of African swine fever, a fatal pig disease that has spread throughout Asia.