Chicago | Reuters — U.S. lean hog futures surged to a contract high on strong demand and technical buying on Tuesday, while cattle futures also advanced, analysts said.
Chicago Mercantile Exchange April lean hog futures settled up 2.575 cents at 78.075 cents/lb. (all figures US$). The contract traded up to 78.225 cents, topping a previous life-of-contract high of 77.6 cents from last Tuesday.
CME April live cattle ended 0.825 cent higher at 122.525 cents/lb. March feeder cattle finished up 1.2 cents at 139.125 cents/lb.
Strong export and domestic demand for U.S. beef has helped support cattle futures, analysts said.
“It’s more of a demand story today than anything else,” said Altin Kalo, agricultural economist for Steiner Consulting. “That’s what’s driving the livestock.”
Prices for choice cuts of boxed beef jumped by $1.08, to $236.76/cwt, according to the U.S. Department of Agriculture. Prices for select cuts eased by 55 cents, to $225.04/cwt, after a recent surge.
“Meat prices have really escalated, and it’s certainly caught a lot of people by surprise,” Kalo said.
In China, the world’s top pork consumer, the government has stepped up sales of pork in the run-up to the Lunar New Year holiday, which starts next week, when meat consumption typically peaks in the country.
Beijing will sell 30,000 tonnes of frozen pork from state reserves on Feb. 4, and another 30,000 tonnes on Feb. 9, according to a notice by the China Merchandise Reserve Management Center.
China has grappled with outbreaks of a deadly hog disease, African swine fever, since it was detected there in August 2018, raising the need for meat imports.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.