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CME update: lean hog futures retreat after reaching two-month high

CME lean hog futures sank on 11 August after reaching a two-month high on 10 August.

12 August 2020, at 9:25am

Reuters reports that the COVID-19 pandemic prompted consumers to hoard meat this spring while meatpackers like JBS USA and Tyson Foods temporarily shut slaughterhouses to contain outbreaks among workers. The plant closures in April tanked prices for hogs and caused a bottleneck of market-ready pigs on farms.

CME October lean hog futures settled 2.00 cents lower at 51.825 cents per pound.

Traders on Wednesday 12 August will review monthly USDA data for updates on meat supplies and demand and check data on crops used for livestock feed.

Supplies of US hogs remain too large after producers expanded their herds in recent years, analysts said. Farmers hope that China, the world's top pork consumer, further ramps up imports from the United States.

China is continuing to buy American goods, particularly commodities, under its Phase 1 trade deal with the United States, despite rising tensions, top White House economic adviser Larry Kudlow said.

China's WH Group, owner of Smithfield Foods, said it expects US pork exports to China to fall in the second half, as the pandemic hit volumes handled at US processing plants and pushed up prices.

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