Chicago | Reuters — U.S. hog futures leapt to their highest price since May 2019 on Friday on strong domestic demand for pork, while feeder cattle futures tumbled to a three-month low.
Gains in the swine market extend a rally driven by rising cash prices for hogs and demand from consumers.
“Domestic demand has been faring better than we expected,” said Arlan Suderman, chief commodities economist for U.S. broker StoneX.
Chicago Mercantile Exchange October lean hogs advanced 0.775 cent to 78.125 cents/lb. and touched its highest price since May 28, 2019 (all figures US$). Most-active December hogs settled up 0.275 cents at 67.125 cents, near a nine-month high reached on Thursday.
The U.S. Department of Agriculture, in a monthly supply and demand report, reduced its 2020 domestic pork production forecast, citing lower commercial hog slaughtering in the second half of the year and lighter carcass weights.
The 2020 and 2021 pork export forecasts were lowered from last month because of “weakness in global import demand,” according to USDA.
Some analysts said demand from China, the world’s top pork consumer, was still supportive to the hog market. China needs to import more meat after suffering an outbreak of a fatal pig disease, African swine fever, over the past two years.
China’s agriculture ministry on Friday confirmed African swine fever in piglets illegally transported to the southwestern city of Chongqing, the first reported outbreak since July 25.
“We’re expecting a very robust export shipment season to close out the year, especially to China,” Suderman said.
In the beef market, CME October live cattle futures rose 0.175 cent, to 109.875 cents/lb. Most-active December cattle eased 0.025 cent, to 112.6 cents.
CME November feeder cattle dropped 0.925 cent, to 135.525 cents/lb., under pressure from surging prices for U.S. grain used as livestock feed.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.