CME update: lean hog futures sink amid demand questions
US lean hog futures dipped on 16 June as questions about whether pork export demand from China will increase and erode the US stockpile.
17 June 2020
2 minute read
By: Reuters reports that CME July lean hog futures, the most actively traded contract, settled down 2.625 cents to 49.65 cents per pound, while August futures settled down 2.25 cents to 53.025 cents.
The reported USDA hog kill for 15 June showed increased slaughter rates. The USDA estimates that packers processed an estimated 548,000 head – up from 444,000 last week – but it is still down nearly 3.6 percent from 2019.
"We're slaughtering a lot of hogs," Karl Setzer, commodity risk analyst for AgriVisor said. "We are simply oversupplied with pork."
While China is shuttering some of its markets due to the coronavirus pandemic, traders say the uncertainty about whether that will lead to more US pork exports continues to weigh on futures.
China plans to auction 10,000 tonnes of frozen pork from state reserves on 18 June, the China Merchandise Reserve Management Center said on Tuesday.
