By Julie Ingwersen
CHICAGO, July 29 (Reuters) – Chicago Mercantile Alternate lean hog futures closed blended on Thursday as strain from information of a lethal hog illness within the Dominican Republic offset assist from robust export gross sales and agency money hog costs, merchants stated.
CME August lean hog futures LHQ1 settled up 0.600 cent at 106.300 cents per pound, whereas the most-active October hog contract LHV1 ended down 0.550 cent at 88.975 cents.
October hogs fell after the U.S. Division of Agriculture late on Wednesday confirmed African swine fever in samples from pigs within the Dominican Republic, elevating considerations in regards to the danger for transmission to the USA.
The illness destroyed half of China’s hog herd, the world’s largest, inside a 12 months of being detected there in 2018.
“Merchants do not need to get lengthy positions in that market, particularly when you have the potential for African swine fever to point out up over right here,” stated Dan Norcini, an impartial livestock dealer.
Nevertheless, the October contract pared losses and different hog contracts rose, supported by robust weekly U.S. pork export gross sales and concepts that futures are undervalued relative to money hog costs. The CME’s lean hog index .IHX, a two-day weighted common of money costs, was $111.94 per hundredweight, or practically 112 cents per pound, whereas October futures are under 90 cents a pound.
The USDA reported export gross sales of U.S. pork within the week ended July 22 at 38,500 tonnes, up 43% from the prior four-week common. But weekly gross sales to China, a key purchaser, have been a modest 800 tonnes. EXP/PRK
“There’s a whole lot of nervousness within the hog market proper now about whether or not costs can keep at these ranges. A variety of these (futures) costs have been baked in, figuring that you simply have been having Chinese language shopping for (U.S. pork) all 12 months lengthy,” Norcini stated.
Within the cattle markets, futures fell as drought drove up U.S. corn and wheat costs, signaling increased feed prices. GRA/
Benchmark CME October dwell cattle futures LCV1 settled down 0.375 cent at 128.150 cents per pound, pressured as September feeder cattle FCU1 tumbled 1.500 cents to complete at 161.950 cents per pound.
The USDA reported U.S. beef export gross sales for the week to July 22 at 22,500 tonnes, down from the earlier week however up 28% from the prior four-week common. EXP/BEEF
(Reporting by Julie Ingwersen; modifying by Richard Pullin)
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