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CME update: lean hog futures challenged over demand questions

Traders reported choppy trading on 17 June as domestic supplies and ramped up slaughtering puts pressure on hog futures.

18 June 2020, at 8:11am

Reuters reports that the futures market was “jittery” on 17 June. In addition to pressure from the US stockpile and rebounding production, pork futures were pressured by concerns of slowed US pork experts.

China’s meat importers fear clearing delays and a hit to demand after one of the country’s major ports began requiring coronavirus tests for all meat and seafood containers to prevent contamination.

Tianjin on the northern coast, the primary port for Beijing, started testing batches from every arriving container on Monday, two importers and an official briefed on the matter said.

Adding to those concerns was news that the size of China's pig herd increased 3.9 percent in May from the previous month, as more newly built pig farms started production, the agriculture ministry said.

US processors are ramping up, but there is a hefty back log of animals to work through, said Jack Scoville, futures market analyst at The Price Futures Group.

"It just takes a while to work through the surplus," Scoville said. "But the situation will improve, and going into the fall, we can start seeing a somewhat tighter market again."

Chicago Mercantile Exchange July lean hog futures, the most actively traded contract, was down for most of the session but settled unchanged at 49.65 cents per pound. August futures settled up 0.15 cents to 53.175 cents on technical buying.

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