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CME update: lean hog futures rise as slaughter pace recovers to pre-pandemic levels

US lean hog futures gained ground on 20 August as slaughter rates returned to levels seen before the COVID-19 pandemic shuttered processing plants due to worker sickness.

21 August 2020, at 9:57am

Reuters reports that October lean hogs gained 2.625 cents to close at 55.175 cents per pound, after hitting the contract’s highest level since 8 May.

The USDA recorded the daily hog slaughter at 481,000 head on 20 August, making an estimated weekly total of 2.633 million head, according to Rich Nelson, chief strategist at Allendale Inc. “This will be the best post-virus processing week,” he said. He warned that the pace must increase further to overcome the fourth quarter seasonal swell of market-ready hogs.

Speaking to Reuters, he said, “starting mid-September we will need several weeks of 2.75 million head and probably one to two weeks of 2.8 million head.”

USDA reported export sales of US pork the week ended 13 August at 20,600 tonnes, nearly double the previous week, but down 27 percent from the prior 4-week average.

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