Chicago | Reuters –– U.S. hog futures extended gains on Wednesday and the front-month contract reached its highest price in about a year due to strength in the cash market, traders said.
Solid pork demand has underpinned cash prices in the face of large hog supplies.
The U.S. pork cutout, an indication of wholesale pork prices, rose on Wednesday afternoon by $2.63, to $95.18/cwt, according to the U.S. Department of Agriculture (all figures US$).
Chicago Mercantile Exchange October lean hogs advanced 0.55 cent to close at 76.875 cents/lb. and reached their highest price since November 2019. The contract has soared 55 per cent since the start of August.
Most-active December hogs settled up 0.7 cent at 64.575 cents and touched their highest price since Sept. 25. The contract is up 28 per cent since the start of August.
Limiting gains was an increase in hog weights, analysts said. The average weight in the week ended Oct. 3 was 283.4 lbs., up from 281.8 a week ago and 282.5 a year earlier, according to the USDA.
Traders on Thursday will assess weekly USDA export sales data for Chinese demand. A fatal pig disease, African swine fever, has created a domestic meat deficit in China, the world’s top pork consumer, and increased the need for imports.
China blocked German pork after the disease was found in wild boars in eastern Germany, and one more case was confirmed there on Wednesday. The U.S., Spain and other suppliers are expected to increase sales to China to compensate for Germany’s absence from the market.
In the U.S. beef market, CME October live cattle futures rose 0.975 cent to 110.175 cents/lb. and reached their highest price since Aug. 20. Most-active December cattle rose 1.15 cents to 113.1 cents.
CME November feeder cattle fell to their lowest price since July 2 before rebounding to close up 0.35 cent at 137.875 cents/lb.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.