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CME update: hog futures rise alongside rallying stock market

US lean hog futures rallied with the rising stock market as the economy slowly reopens.

27 May 2020, at 7:51am

Reuters reports that the overall stock market rally can be tied to optimism about developing coronavirus vaccines and revived business activity. The positive signs buoyed livestock markets that had been hammered by the COVID-19 crisis.

Supportive meat supply data from the USDA late last week indicated that meat demand was ramping up while livestock herds were shrinking – further underpinning prices.

The CME futures market resumed trading on 26 May after the Memorial Day holiday. The holiday is the unofficial start to summer and is usually accompanied by a spike in meat demand.

"The market, because of the summer grilling season, came into the first of the three major summer holidays feeling good about recovering demand," said Mike Zuzolo, president of Global Commodity Analytics.

US pork prices soared to record highs this month amid concerns about meat shortages after outbreaks of COVID-19 at meat processing plants. Prices have eased from those peaks but remain at historically high levels.

June lean hogs gained 1.725 cents to settle at 60.500 cents per lb, while actively traded July futures added 3.675 cents to end at 59.575 cents per lb.

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