US hog futures hit another high on talks of US-China deal
US hog futures climbed to their highest prices in more than a week on Wednesday (25 September) on talk about Chinese buying, traders said.
US President Donald Trump said the Chinese were making big agricultural purchases from the United States, including of beef and pork, and that a deal to end a nearly 15-month trade war could happen sooner than people think.
Traders shrugged off the possibility of big beef sales because of Chinese restrictions on production practices for beef imports. However, they said China was making inquiries about US pork.
China needs meat as it continues to struggle with African swine fever, that has decimated its herd over the past year. The disease has also spread to Vietnam and other countries. South Korea confirmed a sixth case in a town near its border with North Korea.
Stronger cash prices for US pork indicate China was making purchases, traders said.
US hog carcasses rose by $1.17 per cwt, according to US Department of Agriculture (USDA) estimates yesterday morning (25 September). Morning reports showed cash carcass prices were also higher on Monday and Tuesday.
Traders will check weekly USDA export sales data on Thursday for confirmation of Chinese buying.
December lean hog futures finished up 2.3 cents at 72.4 cents per pound at the Chicago Mercantile Exchange and hit their highest price since 16 September.
In the beef market, December live cattle futures reached their highest price since 9 August. The contract closed up 1.075 cents at 108.5 cents per pound.
November feeder cattle futures climbed to their highest price since 2 August and the contract closed up 0.925 cent at 141.125 cents per pound.
Cash cattle prices have stabilised since a fire at a Tyson Foods Inc slaughterhouse last month removed a key buyer from the market, sending prices tumbling. The slaughterhouse remains closed for repairs but meat packers have been killing more cattle at other facilities in the meantime.
The stabilising cash prices are helping to support futures, traders said. Boxed beef prices rose by 0.17 cent for select cuts and declined by 0.76 for choice cuts, according to the USDA.
US meat producers separately cheered a trade deal with Japan that cuts tariffs on American beef, pork and other farm goods.
