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CME update: lean hog futures gain against cash markets

Traders report that US live hog futures rose on 21 May on short-covering as contracts strengthened against cash markets.

22 May 2020, at 8:02am

Reuters reports that the CME June lean hogs contract gained 2.475 cents to 59.35 cents per lb, while the July contract lifted 1.375 cents to 57.175 cents per lb.

The USDA reported Thursday’s daily hog slaughter totals at 398,000, rising slightly from Wednesday’s numbers. The 21 May daily total was the highest since 17 April.

"With the slaughter increases coming, demand for hogs is going to increase," said Doug Houghton, technical analyst at Brock Capital Management. "It says to me the front-end contracts were probably a bit too far discount to cash, and there’s probably some profit taking on short positions."

Slaughter numbers remain below pre-coronavirus pandemic averages, as coronavirus outbreaks at slaughter facilities have led to plant closures, backing up hogs and cattle at the farm level.

USDA showed a slight drop in cold storage meat supplies on Thursday. Frozen pork is down 1 percent from last year.

Pork shipments to China totalled 19,800 tonnes last week, with 12,600 tonnes of pork cancelled and 400 tonnes of beef shipped, according to the USDA.

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