Chicago | Reuters — U.S. hog futures climbed to their highest prices in more than a week on Wednesday on talk about Chinese buying, traders said.
U.S. President Donald Trump said the Chinese were making big agricultural purchases from the United States, including of beef and pork, and that a deal to end a nearly 15-month trade war could happen sooner than people think.
Traders shrugged off the possibility of big beef sales because of Chinese restrictions on production practices for beef imports. However, they said China was making inquiries about U.S. pork.
China needs meat because it is struggling with an outbreak of African swine fever, a fatal pig disease that has decimated its herd over the past year. The disease has also spread to Vietnam and other countries. South Korea confirmed a sixth case in a town near its border with North Korea.
Stronger cash prices for U.S. pork indicate China was making purchases, traders said.
U.S. hog carcasses rose by $1.17/cwt, according to U.S. Department of Agriculture (USDA) estimates on Wednesday morning (all figures US$). Morning reports showed cash carcass prices were also higher on Monday and Tuesday.
Traders will check weekly USDA export sales data on Thursday for confirmation of Chinese buying.
December lean hog futures finished up 2.3 cents at 72.4 cents/lb. at the Chicago Mercantile Exchange and hit their highest price since Sept. 16.
In the beef market, December live cattle futures reached their highest price since Aug. 9. The contract closed up 1.075 cents at 108.5 cents/lb.
November feeder cattle futures climbed to their highest price since Aug. 2 and the contract closed up 0.925 cent at 141.125 cents/lb.
Cash cattle prices have stabilized since a fire at a Tyson Foods slaughterhouse last month removed a key buyer from the market, sending prices tumbling. The Kansas slaughterhouse remains closed for repairs but meat packers have been killing more cattle at other facilities in the meantime.
The stabilizing cash prices are helping to support futures, traders said. Boxed beef prices rose by 0.17 cent for select cuts and declined by 0.76 for choice cuts, according to the USDA.
U.S. meat producers separately cheered a trade deal with Japan that cuts tariffs on American beef, pork and other farm goods.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.