ShapeShapeauthorShapechevroncrossShapeShapeShapeGrouphamburgerhomeGroupmagnifyShapeShapeShaperssShape

CME update: lean hog futures strengthen due to expected sales to China

6 March 2020, at 9:42am

According to reporting from Reuters, the most-active April hogs contract finished 1.075 cents higher at 65.375 cents per pound and reached its highest since Feb. 26. June hog futures rose 0.550 cent to 79.375 cents.

The USDA reported that China purchased 4,475 tonnes of US pork from 21-27 February, down from 7,223 tonnes a week earlier. US pork shipments to China rose to 17,531 tonnes from 15,701 tonnes the previous week. Those were second biggest shipments since July 2014, after 18,617 tonnes were reported from 17-23 January, according to USDA data.

Last month, China said it would grant exemptions on retaliatory duties levied against 696 US goods, including pork, as part of Beijing’s commitments on the interim trade deal with the United States.

"Shipments have been really solid," said Dennis Smith, a commodity broker for Archer Financial Services. "Sales presumably will take a big spike once they can do it on a tariff-free gig."

China, the world's top pork consumer, is grappling with an ongoing epidemic of African swine fever which has decimated its pig herd.

The COVID-19 outbreak has also clouded the outlook for Chinese demand of US farm goods. However, agriculture officials expect China to meet this year’s grain targets, adding that a recovery of the pig herd was on track.

Read more about this story here.