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CME update: lean hog futures notch contract highs as cash markets firm

US lean hog futures rose on 1 April, with several contract months including the benchmark June setting life-of-contract highs on firm cash markets and strong demand for pork.

2 April 2021, at 8:24am

Reuters reports that CME June lean hogs settled up 1.025 cents at 106.325 cents per pound, after recording a contract high at 106.725 cents.

Rising cash hog prices supported futures. The CME's lean hog index, a two-day weighted average of cash prices, climbed to $98.50 per cwt, its highest since October 2014.

"Pork demand continues to be good. The packers seem to be having trouble getting numbers. They are having to compete for hogs and put higher cash on the board, and it's keeping those front months elevated," said Dan Norcini, an independent livestock trader.

Export sales of US pork in the week to 25 March were robust at 61,000 tonnes, a marketing year peak, with China booking 29,700 tonnes and shipping 11,900 tonnes, the US Department of Agriculture reported.

Domestic demand for pork and beef remains strong, with the start of the summertime grilling season coinciding with renewed demand from the food service sector amid expectations for the US economy to rebound after the coronavirus pandemic.

"Traders are looking at the return of the restaurant business and consumers that are flush with cash from stimulus checks. They are expecting good, strong, red meat demand as we get into the spring and summer grilling season," Norcini said.

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