CME update: hog futures sink by daily limit as profit-taking hits market

US lean hog futures sank by their daily exchange-imposed trading limit on 15 April as profit-taking overwhelmed the market following blistering rallies.

16 April 2021, at 8:34am

Reuters reports that the setback is a turnaround from gains that have lifted profits for pig farmers after they struggled last year when the COVID-19 pandemic reduced restaurants’ demand for meat and temporarily closed slaughterhouses.

The May, June, July and August hog futures contracts ended down the 3-cent limit, after all but August futures set contract highs on Monday 12 April.

The benchmark June futures contract settled on Thursday at 104.700 cents per lb at the Chicago Mercantile Exchange (CME). The contract is still up 26% percent from the start of the year.

CME will temporarily expand daily trading limits to 4.5 cents on Friday 16 April.

Weekly US pork export sales reported on Thursday were also poor.

The US Department of Agriculture said sales for delivery in 2021 fell to 17,200 tonnes in the week ended on 8 April, a marketing-year low. That was down 48% from the previous week and 60% from the prior four-week average.

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