Chicago | Reuters — Chicago Mercantile Exchange lean hog futures jumped on Wednesday as China reported a new outbreak of a deadly pig disease, raising expectations that Chinese importers could increase U.S. purchases.
China’s farm ministry confirmed African swine fever in piglets being illegally transported through Funing county in the southwestern province of Yunnan.
The case comes amid growing concern that a severe wave of disease in recent months has hit China’s hog herd, the world’s largest.
CME April lean hog futures ended up 2.575 cents at 87.925 cents/lb., after touching a life-of-contract high of 90.675 cents/lb. last Thursday (all figures US$).
Traders said they were uncertain about the extent of the risk to the Chinese herd from African swine fever, or ASF, which was first detected in China in August 2018.
China’s Dalian soybean futures reached a record high on Wednesday, signaling to some traders that demand for animal feed is strong because the herd is recovering.
“They’re still battling ASF over there,” said Jim Gerlach, president of A/C Trading in Indiana. “They can’t be battling it too bad with record highs in beans.”
The U.S. Department of Agriculture on Thursday will issue a weekly export sales report, providing an update on demand for pork and beef.
Strong export and domestic demand for U.S. beef recently supported CME cattle futures prices, though prices have declined this week.
Choice cuts of boxed beef on Wednesday fell by $1.65 to $233.03/cwt, while select cuts declined by $1.93 to $224.24 per cwt, according to USDA.
CME April live cattle finished down 0.025 cent at 119.4 cents/lb., after hitting a life-of-contract high of 126.7 cents on Feb. 16.
April feeder cattle futures rose 0.825 cent, to 141.3 cents/lb.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.