Hogs Fall as China Fails to Boost Pork Buying

CHINA - Hog futures fell from a seven-week high as China failed to step up purchases of U.S. pork as some analysts and traders had expected. Cattle declined.
calendar icon 22 November 2007
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China, the sixth-largest buyer of US pork, has yet to disclose any major purchases since agreeing in August to buy 27,000 metric tons of the meat from Smithfield Foods Inc., analysts said. Hogs jumped 4.7 percent yesterday, the most in a week, on speculation another Chinese purchase was imminent.

"The China news is just rumors at best," said Chad Henderson, an analyst with Prime Agricultural Consultants in Brookfield, Wisconsin.

Hog futures for February delivery fell 0.25 cent, or 0.4 percent, to 62.75 cents a pound on the Chicago Mercantile Exchange. Trading ended early and will be closed tomorrow for the Thanksgiving holiday. The most-active contract, down 5.7 percent from a year ago, has gained 23 percent since Nov. 6 on speculation demand for US pork will increase.

Smithfield Foods, which normally closes its plants on Sundays, will operate its John Morrell pork-processing plant in Sioux City, Iowa, on Nov. 25, spokesman Jerry Hostetter said. The increase in pork production isn't related to a special order from China, he said today in an e-mail.

Smithfield is running the plant to clear out excess supplies of hogs, Hostetter said. US meat processors have slaughtered 94.4 million hogs this year through Nov. 17, up 3.5 percent from the same period a year ago, government data show.

Source: Bloomberg.com

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