Chicago | Reuters — U.S. lean hog futures rallied to new contract highs on Monday on rising concerns about the spread of a deadly pig disease in China, the world’s largest hog and pork market, and as wintry weather in the U.S. Midwest threatened to disrupt hog movement.
The gains followed a surge in hog futures prices overnight on China’s Dalian Commodity Exchange amid worries about the hog herd’s rebound from a two-year battle with African swine fever.
“The Chinese hog futures were up four per cent on concern about the hog disease over there. That led to some follow-through here,” said Don Roose, president of U.S. Commodities.
China’s hog herd woes have propelled pork imports to their highest-ever levels over the past two years. The U.S. Department of Agriculture reported last week that pork sales to China hit a three-month high in the latest reporting week, a trend that is likely to continue, analysts said.
Meanwhile, frigid weather, snow and ice across the U.S. Midwest threatened to disrupt normal marketing of hogs, which was supportive to nearby futures prices.
Chicago Mercantile Exchange (CME) April lean hogs ended 0.35 cent higher at 80.65 cents/lb. after notching a contract high of 81.075 cents (all figures US$). It was the fifth straight session in which the actively traded contract posted a new life-of-contract high.
Live cattle futures were mostly higher on Monday as harsh winter weather raised concerns about slower cattle weight gains before surging feed grain prices clipped gains. Feeder cattle were lower.
CME April live cattle closed 0.175 cent higher at 123.95 cents/lb. after reaching a contract high of 124.775 cents during the session.
March feeder cattle fell 0.825 cent to close at 137.45 cents/lb.
— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago.