Chicago | Reuters — Chicago Mercantile Exchange (CME) lean hog futures firmed on Thursday, after China lowered its sow herd targets in an effort to ensure supply and stabilize prices.
China’s ministry of agriculture and rural affairs said the target for its sow herd was now around 41 million head for 2021-2025 and should be no lower than 37 million head.
“China is encouraging its producers to restrict their sow herd numbers,” said Rich Nelson, chief strategist at Allendale Inc. “That is certainly supportive of deferred contracts.”
October lean hogs firmed 0.9 cent to 84.75 cents/lb., while the December contract added 3.125 cents, to 76.5 cents/lb. (all figures US$).
Pork export sales firmed, with 32,600 tonnes sold for the week ended September 16, up 29 per cent from the week prior and 12 per cent higher than the previous four-week average.
Cash pork softened, with the CME’s lean hog index, a two-day weighted average of cash prices slipping 91 cents to $92.65/cwt.
CME’s live cattle was mixed-to-lower ahead of the U.S. Department of Agriculture’s monthly cattle on feed report, due Friday afternoon, pressured as market-ready cattle add weight on slaughter delays.
“We’ve had a few plants off and on over the past two to three weeks, due to labour problems or mechanical issues,” Nelson said.
For the week, packers have slaughtered 477,000 head of cattle, down 1.24 per cent from a year ago.
Friday’s monthly cattle-on-feed report is expected to show tighter on-feed supplies from a year ago, translating to diminished market-ready cattle in the first part of 2022.
“These placement numbers impact February through June processing numbers,” said Nelson. “Q1 is going to be a tight supply picture.”
Supplies should improve heading into the summer, he added.
Wholesale beef prices dipped, with choice cuts falling $2.23, to $305.60/cwt. and select cuts eased 51 cents, to $274.99/cwt. according to USDA.
CME October live cattle futures ended 0.05 cent lower at 123.225 cents/lb., while December futures rose 0.075 cent to 128.625 cents/lb.
Feeder cattle futures eased, with benchmark November feeders falling 0.125 cent to 158.1 cents/lb.
— Christopher Walljasper reports on agriculture and ag commodities for Reuters from Chicago.