Chicago | Reuters — U.S. lean hog futures closed higher on Friday for a second session on follow-through buying after Thursday’s limit-up close and reminders of stepped-up Chinese demand for U.S. pork, traders said.
Benchmark April lean hog futures on the Chicago Mercantile Exchange (CME) settled up 1.375 cents, at 66.25 cents/lb. (all figures US$).
The market continued to react to comments from a Tyson Foods executive about surging pork demand from China, where an outbreak of African swine fever has devastated the Chinese hog herd, tightening pork supplies.
Read Also
Alberta crop conditions improve: report
Varied precipitation and warm temperatures were generally beneficial for crop development across Alberta during the week ended July 8, according to the latest provincial crop report released July 11.
Tyson CEO Noel White told analysts on a conference call Thursday that the company’s first-quarter orders to China were up nearly 600 per cent from a year earlier.
Several traders cautioned that year-ago pork sales to China likely were relatively small. Also, CME lean hog futures were seen as oversold and primed for a rebound after the April contract tumbled 16 per cent last week.
“The market’s reaction to the Tyson comments was ridiculous. However, I don’t think we are going to going to go back down,” said Rich Nelson, chief strategist for Allendale Inc.
“The Tyson comment reminded the trade that there is a good build-up in pork exports for this year,” he said.
CME lean hog futures traded under expanded limits on Friday but limits for Monday’s session will revert to the standard three cents/lb., the exchange said.
Live cattle futures closed marginally higher, following the strength in lean hogs, even as cash cattle traded in Kansas and Texas at $121/cwt, down from $122 last week, traders said.
The CME benchmark April live cattle futures contract settled up 0.05 cent at 119.8 cents/lb. Front-month February rose 0.2 cent to close at 121.325 cents.
CME March feeder cattle futures fell 0.7 cent to end at 135.2 cents/lb.
The wholesale choice boxed beef cutout value fell 81 cents to $210.12/cwt on Friday while select cuts tumbled $2.07, to $203.89/cwt, the U.S. Department of Agriculture said.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago.
