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CME update: hog futures end mostly lower as virus and industry worries weigh on futures

Actively traded February lean hog contracts ended lower on 16 November as fears of rising coronavirus infections, likely restaurant closures and rising feed costs offset gains.

17 November 2020, at 10:12am

Reuters reports that though equities markets soared on news of a second promising COVID-19 vaccine lifted both the S&P 500 and the Dow Jones Industrial Average to record highs on Monday 16 November, lean hog markets were more measured following severe meat supply chain disruptions earlier this year.

"The packers, while they're making excellent money, are very tepid about wanting to step in and buying too much ahead until they get a better idea of when that COVID vaccine is going to arrive," said Mike Zuzolo, president of Global Commodity Analytics.

Many US cities and states have tightened restrictions on gatherings due to rising coronavirus infection rates. Worries are growing that many restaurants and food service businesses may not survive another lockdown.

Lean hog futures closed mostly lower on Monday as traders weighed coronavirus risks, rising feed and labour costs for meat producers and prospects for pork imports by China.

China has made better-than-expected progress on rebuilding its hog herd after African Swine Fever (ASF) decimated the industry. Tyson Foods CEO Stewart Glendinning, however, said on Monday that ASF in China "is not going away any time soon."

The meat industry is also facing rising feed and labour costs stemming from the coronavirus pandemic.

December lean hogs ended 0.250 cent higher at 65.150 cents per pound, while actively traded February contracts fell 0.800 cent to 63.775 cents.

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