CME update: lean hog futures reach four-month high as export demand strengthens

Strong export demand for US pork moved CME lean hog futures to a four-month high on Friday 4 September.
calendar icon 7 September 2020
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Reuters reports that traders are optimistic that China, the world’s biggest pork consumer, will retain its position as a strong buyer and importer of US pork. The USDA reported strong weekly export sales on 3 September.

Chinese importers have been bringing in huge volumes of pork and other meat to fill a domestic shortage after multiple outbreaks of African swine fever killed millions of pigs in China.

"The hogs have been on a big run," said Don Roose, president of Iowa-based broker US Commodities.

Chicago Mercantile Exchange October lean hogs settled up 0.575 cents at 59.825 cents per pound and set their highest price since 4 May.

Chinese demand should be strong through the end of the year, Dan Halstrom, president of the industry group US Meat Export Federation, said in a statement.

The United States exported 69,793 tonnes of US pork to China in July, up from 60,453 tonnes a year earlier, according to the latest official USDA data. From January to July, exports reached 646,860 tonnes, up from 237,487 a year earlier.

Profit margins for meatpackers on Friday 4 September were $54.35 per hog, up from $46.80 a week ago, according to Denver-based livestock marketing advisory service

"The packers are bidding up for hogs because domestic demand has been strong," Roose said.

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